W v. W

bjbj IN THE DISTRICT COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION MATRIMONIAL CAUSES SUIT NO. 2348 OF 2002 _________________ BETWEEN W Petitioner and W Respondent _________________ Coram : H.H. Judge Bruno Chan in Chambers Date of Hearing : 18, 23 25 September & 6 October 2003 Date of Judgment : 5 November 2003 _________________ J U D G M E N T _________________ 1. This is the Petitioner Wife s application for ancillary relief against the Respondent Husband upon the dissolution of their lengthly marriage of almost 30 years. For convenience purpose I shall refer to the parties as Husband and Wife in this judgment. 2. The parties were married in 1973 in United Kingdom when the Husband was 23 and the Wife 20. The Husband was then a college student studying for a degree in Textile Marketing sponsored by his employer, whereas the Wife was then a laboratory technician and later a clerical officer and executive officer at the Department of Health and Social Security until 1977 when their first child, J, was born and thereafter the Wife became a full-time housewife and mother. A second child, D was soon to follow in 1979. Both of them are now over 21 and are self-supporting. 3. Following his graduation, the Husband s career had been successful working for a large retail electronics company in United Kingdom where he rose to the position of managing director in 1990, and in 1991 he assumed the position of marketing vice-president of an associated company based in Belgium for one year before the family was relocated back to United Kingdom where they had a 5 bedroom house in Sutton Coldfield. 4. In 1995 the Husband was head-hunted to Hong Kong to join a large electrical company as a manager at a salary of initially HK$55,000 per month plus expatriate package including accommodation, bonus, company car, medical and leave allowance as well as provident fund. In 1998 he became managing director and in 2001 his salary was increased to HK$110,000 per month. During his employment in Hong Kong the parties enjoyed a well-to-do lifestyle including accommodation in a 3 bedroom apartment in MacDonnell Road, membership at the Aberdeen Boat Club, holidays in Asia and UK, and frequent dinings in restaurants. 5. When the Wife was first relocated to Hong Kong, she initially volunteered to work in a church bookstore but later became a part-time bookstore assistant in October 1996 until April 2000 when she resigned due to health problem and family commitments. At about this time the parties sold their joint property in Sutton Coldfield, and used the proceeds to finance the purchase of a small flat in London in their joint names, and another flat in Huddersfield, also in their joint names, for their son s use during his tertiary education. 6. In early 2001 the Husband suddenly asked for a separation and admitted that he had formed a relationship with a younger woman. After discussing the matter with the Wife, he agreed to end the affair and the parties spent some time in United Kingdom and later went together on a holiday in Australia in October 2001. However upon their return to Hong Kong, the Husband again asked for a separation and announced that he had resumed his relationship with the said woman. 7. In November 2001 the Wife moved back to United Kingdom and the following arrangements were made between the parties in respect of their properties : - The Wife s interest in the 2 properties in London and r maintenance in UK. 9. In March 2002 the Wife returned to Hong Kong and met with the Husband when she was told that there was no chance of a reconciliation. When she was unable to gain entry into their former matrimonial home at MacDonnell Road, she decided that the marriage was at an end and therefore instituted these proceedings by issuing a petition for divorce on 8th March 2002 against the Husband based on his behaviour. 10. In April 2002 the Husband increased his interim maintenance for the Wife t r payment and the Wife s needs for continuing monthly maintenance as the Husband proposed that the equal division of all the assets should be a clean break between the parties with the Wife s share of the cash assets be payable over a period of 4 years, whereas the Wife insisted in immediate payment plus substantial monthly maintenance to continue after the divorce until the Husband s retirement at 65. 11. The decree nisi of divorce was eventually granted without opposition on 18th March 2003 with the question of ancillary relief adjourned for the parties to file their affidavit of means. Unfortunately in April 2003 the Husband was made redundant by his employer and received compensation of about HK$1.2 million including his provident fund and repatriation allowance. He was also paid 6 months of salary up to October 2003 with rental allowance covered up to February 2004. He eventually conceded that there are insufficient assets between the parties to achieve a proper clean break settlement but that in the light of his loss of employment, the Wife should only be entitled to a nominal maintenance, preserving her right to seek substantial maintenance if and when he finds employment or when his financial position improves. 12. The Wife does not dispute the Husband s unemployment situation, but believes that he should be able to find further employment soon with his substantial earning capacity, and with the available liquid assets at his disposal, he should pay her monthly maintenance up to the year 2015. With neither party willing to compromise on this issue, the matter therefore sent to trial when both of them gave extensive oral evidence, with the Wife having flown in from UK for this purpose. The law 13. In deciding on the Wife s claims for ancillary relief, I am required by S. 7 (1) of Matrimonial Proceedings and Property Ordinance to have regard to the conduct of the parties and all the circumstances of the case including the following matters, that is to say : - the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future; the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; the standard of living enjoyed by the family before the breakdown of the marriage; the age of each party to the marriage and the duration of the marriage; any physical or mental disability of either of the parties to the marriage; the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family; in the case of proceedings for divorce or nullity of marriage, the value to either of the parties to the marriage of any benefit (for example, a pension) which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring. The Evidence 14. Before considering the evidence of those matters aforesaid, it would be usefu th house contents but less outstanding mortgage 195,480.00 (ii) Huddersfield flat in Husband s sole name and free of mortgage 55,000.00 York flat in Wife s sole name and free of mortgage 215,000.00 ______________ Sub-total : 7,067.00 Northern Rock 60 24,032.00 Friend Provident 9,849.00 Assurance Equities 1,056.00 Northern Rock 31,330.00 Investment PEPs 30,792.00 Royal & Sun Alliance 67,670.00 Intertan Pension (old) 132,555.00 Towry 24,415.00 _____________ Sub-total : e to the Husband in recognising the Wife s contributions made to the marriage, despite some criticism of her for not acceding to his request to entertain at home in Hong Kong as she did not have the assistance of domestic helper. There is no dispute that all these assets were accumulated with the Husband s income throughout the marriage, and equally there is no question of the Wife s contributions to the welfare of the family by looking after the home and caring for the children, and on this it would be relevant to refer to the evaluation of the contribution of the homemaker and child carer by Lord Nicholls in White v White [2000] 2 FLR 981, 989 C : Typically, a husband and wife share the activities of earning money, running their home and caring for their children. Traditionally, the husband earned the money and the wife looked after the home and the children. This traditional division of labour is no longer the order of the day. Frequently both parents work. Sometimes it is the wife who is the money earner, and the husband runs the home and cares for the children during the day. But whatever the division of labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party when considering paragraph (f), relating to the parties contributions. This is implicit in the very language of paragraph (f) : the contribution which each has made or is likely to make to the welfare of the family, including any contribution by looking after the home or caring for the family . If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets. There should be no bias in favour of the money-earner and against the home-maker and the child-carer. There are cases, of which the Court of Appeal decision in Page v Page (1981) 2 FLR 198 is perhaps an instance where the court may have lost sight of this principle The discretionary powers, conferred by Parliament 30 years ago, enable the courts to recognise and respond to developments of this sort. These wide powers enable the courts to make financial provision orders in tune with current perceptions of fairness. Today there is greater awareness of the value of non-financial contributions to the welfare of the family. There is greater awareness of the extent to which one spouse s business success, achieved by much sustained hard work over many years, may have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over may years. There is increased recognition that, by being at home and having and looking after young children, a wife may lose forever the opportunity to acquire and develop her own money earning qualifications and skills . 17. While there seems to be no dispute over the division of assets, great issues have been taken over the parties needs and expenses. The London flat has been let out any objection and had lived on the said amount without any complaint or resorting to a overdraft facility arranged for her by the Husband, until March 2002 after the institution of the divorce proceedings when her spending started to increase, with a new enthusiasm for shopping and her personal expenditure has since soared with multiple visits to the same store sometime in the same day. He says that notwithstanding her view that she is on a limited budget, from July 2002 to July 2003 she spent by that time. 19. The Husband s view is that such spending pattern does not reflect the normal pattern of the Wife in Hong Kong, nor does it truly reflect the UK style where the cost of supermarket items is much lower than in Hong Kong, and that such change in her spending pattern since March 2002 is wholly consistent with his view that she has inflated her expenditure for these proceedings. 20. The Wife says that the figure of ng the realization that the marriage had definitely broken down, she says she has found the ending of their long marriage very difficult, and therefore goes shopping frequently in order to get out of the house and to meet people. She also has a lot of friends who come to her home often to socialise with her, hence high supermarket costs for her, which she says is no less expensive in England than Hong Kong. 21. It is also pointed out on her behalf that her food expenses at f her former standard of living. 22. There is no doubt that during their stay in Hong Kong, the parties were able to enjoy a well-to-do lifestyle with membership at the Aberdeen Boat Club, holidays in Asia and UK, and frequent dining in restaurants. The Husband s credit cards show a typical monthly expenditure in excess of HK$20,000, and sometimes $30,000 or more, for shopping and restaurant meals for the family prior to the breakdown of the marriage. His monthly income had increased from HK$55,000 in 1995, to HK$91,000 in 1998, and finally HK$110,000 in 2001, with bonus and other perks on top. The parties were able to put their 2 children through college and set up 2 properties in UK, with the one in Huddersfield purchased to assist their son while he was in college. 23. However it is argued for the Husband that this period immediately before the breakdown of the marriage was not representative of the bulk of the marriage, that in fact before coming to Hong Kong in 1995, the disposable income of the fa as in 2001 after their daughter s marriage and their son in the final year of college, that the parties had no extraordinary expenses and hence there were more funds available from the Husband s increased salary which was the cause for the increased credit card spending which were mainly on the Wife s clothing, lunches with friends and beauty treatment, as well as eating out for both of them. This increased spending, the Husband argues, was in response to more disposable cash, and it was not the standard enjoyed through even all the years in Hong Kong, and that in any event this well-to-do lifestyle included club, company car, medical insurance were all terminated in April 2003 by his redundancy. 24. Section 7 (1) (c) requires the court to have regard to the standard of living enjoyed by the family before the breakdown of the marriage . It does not refer to the standard throughout the marriage or the bulk of the marriage but that before the breakdown of the marriage. So at what point of time before the breakdown of the marriage should the standard of living be considered? Financial situation changes and standard of living varies, and in my view, it must be the period of a well-settled lifestyle leading up to the time of the breakdown of the marriage that is relevant. In the present case it would be the period after the parties relocation to Hong Kong and in particularly from about 2001 when the Husband s salary was increased to HK$110,000, which shows a lifestyle which was commensurately of a comfortable middle class standard in Hong Kong. This factor must however be taken into account in conjunction with section 7 (1) (b) in particularly in view of the recent changes of circumstances including the Husband s redundancy and the Wife s return to reside in UK. 25. While the section does not provide any method of calculating periodical payments, in assessing the Wife s needs and maintenance, it would be helpful to bear in mind the basic principle enunciated in the case of Kershaw v Kershaw [1996] P. 13, 17 Div Ct : If any general principles are to govern the approach to a wife s maintenance, I think they are as follows: In cohabitation a wife shares with her husband a standard of living appropriate to his income or, if she also is earning, their joint incomes. If cohabitation is destroyed by the wrongful conduct of the husband, the wife s maintenance should be so assessed that her standard of living does not suffer more than is inherent in the circumstances of separation. Her standard of living may well have to be lower after the breach of cohabitation than it was before, since there may now be two households to be maintained in place of the former one, in which household expenses were shared. Although the standard of living of both parties may therefore have to be lower than it was before there was the breach of cohabitation, in general the wife should not be relegated to a lower standard of living than that which her husband enjoys . 26. The Wife has been living on the maintenance and lump sum paid by the Husband since November 2001, and there is no question that her spending had indeed increased substantially in 2001 when compared with the previous years of 1999 and 2000 as evidenced by her credit cards statements. The summary of her credit card expenses for that period prepared by the Husband (Bundle 3 p. 1021) shows an increase from an average of about HK$6,400 per month in both 1999 and 2000 to more than HK$12,000 per month in 2001, and from July 2002 to July 2003, she spent more than h of the matter is that after the Wife became aware of the Husband s relationship in 2001, she found the ending of their long marriage extremely difficult, in particularly when it came at a time when the parties had properly discharged their parental duties towards their children and were looking forward to reaping the financial rewards of the Husband s successful career, it must have been a terrible shock and traumatic blow to the Wife when the Husband asked for a divorce because of his relation with a younger woman. People deal with their emotion in this situation differently, and I can understand why the Wife has found it necessary to go shopping and, in her own words, just to get out of the house to meet people. I believe this enthusiasm for shopping will eventually cease once the Wife has got over the trauma and there are already signs of restraints over spending since her relocation to UK. 27. The Wife has in fact come down from her claim for monthly maintenance from vel will be as much or substantial as before when the parties were staying in Hong Kong, and with the conclusion of these proceedings and with the healing of her emotion over time, the Wife will hopefully no longer find it necessary to get out of the house to socialize as much as before, and therefore it would be appropriate to bring her claimed expenses for this item down to a more realistic sum of s redundancy, she now needs a BMW almost twice as expensive, which is based on the assertion that although the family never had a BMW or Mercedes during the marriage, they had hired top of the range cars for use during their holidays. The Husband s evidence is that he hired an estate car on one holiday as he had furniture to move, and on another holiday he got a good deal on a small Mercedes. 32. I agree with the Husband that the Wife does not really need a BMW which is mainly for visiting her parents, and that in any event it is a capital expense which should be funded by her share of the assets, and hence it is entirely up to her to decide how she should best use her capital and what sort of car she should have. I do however accept that her capital assets will not be able to generate a pension to adequately provide for her retirement and that her proposed investment for a further pension is not unreasonable. 33. In conclusion, with the evidence before me and having heard and seen the Wife in evidence, I do not believe that she has deliberately inflated her expenditure for these proceedings. As I have said, I believe her sudden increased in her spending was partly necessary for the setting up of a new home and new life in UK, and partly the result of the way she dealt with her emotion response to the breakdown of the marriage, and with the adjustments which I have made to her expenditure, I would put her total monthly expenses at a more realistic sum of ity, there is one more matter about the Wife that I need to examine, i.e. her earning capacity and whether she should return to work to subsidize her income after the divorce. 35. There is no dispute that although she did work at Unilever and the Department of Health and Social Security early in the marriage, the Wife had not work after the birth of their elder child in 1977 until some 20 years later in 1996 when she started to work part-time at St. John s Cathedral bookshop, and later on full time basis, not out of necessity but for social reasons, until she ceased work in 2000 due to health problems including migraine, which she says she has had since 16, arthritis of the knee, and a form of vertigo which appears to have been resolved after treatment in June 2003. There is also the stress of these proceedings which she hopes will go away once they are finished. 36. She was also involved in the committees of the club Helena Lee and the Husband says that during her involvement, she appeared to have good administrative skills and turned the club s finances around. The Wife however says she just relayed messages from the committees to the club manager, and that it would be difficult to find work in York which is a university town with young students snapping up work fast. She has not expected to be able to find work, nor should she be required to work again now at the age of 51, but if she does work and is able to find one, based on her son s earnings, she agrees that she may be able to earn between een said that a wife should not be expected to go to work to reduce a former husband s liability towards her. In the case of Ward v Ward [1948] p. 62, 64, Div Ct, Lord Merriman P said this : - The justices may think that this wife, having been deserted by her behind and obliged to go out to work instead of being maintained by him in a comfortable home, is entitled at the least to feel that her exertions are not made purely for the husband s benefit; and might feel obliged in her own interests to put money by against the day when, for example, the husband may remarry or incur other commitments. 38. The situation of the present case is more difficult to assess when the Wife had not worked during the bulk of the marriage, and has no longer the skills or experience to do the kind of work that she used to do during the early years. The matter was expressed in the case of Rose v Rose [1951] p. 29, 30 31, CA when Somervell LJ said : - I do not propose to lay down any general rule or to consider whether or in what circumstances a wife s earning capacity ought to be brought into the calculation of maintenance in the case of a wife who has not been required to earn any money during the matrimonial life. But, in my view, where during the matrimonial life the means of (in this case) the husband (it is not suggested that the wife had any means) are such that the wife has not been required to go out and earn money, then I should say that, in considering the proper sum for maintenance, it would prima facie seem to be wrong that the husband should be able to say : Now you must go out and work, and the only sum that I can be ordered to pay is a sum based on you yourself going out to work, which you were not required to do when you were my wife, and which you would not have had to do, if I had not committed adultery and broken up the home , as in this case. That prima facie approach seems to me to be plainly right in a case such as this, where the marriage had lasted for some twenty years; the wife is a woman of forty-one years of age, who has no normal trade or calling, though no doubt she is capable of doing domestic work, and where there is a child of some four-and-a-half years of age for her to look after . In the same case, it was also said by Denning LJ : - I agree that no general rule can be laid down on the matter, but this wife is certainly under no legal duty to go out to work in order to reduce the maintenance that her husband should pay. It would be quite unreasonable to expect her to do so. She cannot be expected to do it when she has a young child to look after. Of course, if a wife does earn, then her earnings must be taken into account : or if she is a young woman with no children, and obviously ought to go out to work in her own interest, but does not, then her potential earning capacity ought to be taken into account; or if she had worked regularly during the married life, and might reasonably be expected to work after the divorce, her potential earnings ought to be taken into account. Except in cases such as these it does not as a rule lie in the mouth of a wrong-doing husband to say that she ought to go out to work simply in order to relieve him from paying maintenance . And in Le-Roy Lewis v Le-Roy Lewis [1951] p. 29, 31 32, CA, Barnard J said : - It has been suggested that because she was working before the marriage and is still young, and as there are no child of the marriage, she ought at once to go back into the position she was in before the marriage and start earning her living, with as far as I can see only one object, to reduce the amount of money which the husband should pay to her, his wife. I do not accept that view. She may have been lucky, or, at any rate thought that she was lucky at the time, in marrying someone who brought about an improvement in her financial and possibly her social position; but it has been through no fault of hers that their married life together has come to an end, and I see no reason whatever, why the wife should go back to earning in order to reduce the husband s liability to maintain her . 39. Since the statutory guidelines under s. 7 (1) require the court to have regard to the earning capacity which each of the parties has or is likely to have, the principles enunciated above must now be read in the light of the statutory guidelines, and that the court would now expect a wife who is not encumbered by pre-school age children to take, over a reasonable period of time, such steps as are necessary to acquire or increase an earning capacity in order that she should not be financially dependent on her former husband in perpetuity, as per Singer J in T v T (Financial Relief : Pensions) [1998] 1 FLR 1072, 1080 E : W must be encouraged to overcome the apathy which it afflicts her, to put to one side her extremely negative attitude to any suggestion that is made, and to make real attempts to find some reasonably congenial, convenient, interesting and financially rewarding work even if the hours are not ideal, the location is not ideal, the work is not what she would prefer, and she would prefer not to have to do it. For, without for a moment underestimating the difficulties which ladies of her age face in the current employment market, this wife is in my view a lady who, should she wish to do so, would impress a prospective employer with her qualities . 40. I agree that this Wife does have some earning capacity for jobs like the one she last had working in a bookstore or doing administrative work in a club, and that some employer in York may see the advantage in her over college students who just come and go and change jobs all the time. Beside, as pointed out by counsel for the Husband, it will also help to alleviate her loneliness and give her an opportunity to meet people and socialize. I shall now turn to the Husband s financial position. 41. The Husband was made redundant in April 2003 and has since been unemployed. He says he has made every effort to find employment and has produced copies of his application for jobs, e-mail exchanges and follow up contact with search firms as evidence. So far it has been unsuccessful because, he says, of his age of 53 and the current difficult economic climate worldwide, in particularly of the fact that there is a restraint of trade clause in his employment contract with his former employer which prohibits him to undertake or carry out similar job or business activity as before within 12 months of the termination of his employment. 42. Furthermore, he fears that an article in the South China Morning Post on 22nd August 2003 which referred to a substantial inventory write down in his previous company may have damaged his previously good reputation in the retail industry and limited his job prospects. 43. It is also pointed out by the Husband that there are very few electronic retailers in Hong Kong, and only his former company employs expatriate executives, whereas other non-electrical retailers which still employ expatriates, such as Marks and Spencer, train their own executives, while UK retail chains would not be interested in him as he has been away for 8 years, that he is too old and that they also bring up their own executives within the company. The alternative, he says, is to set up his own business which will not contravene the trade restrictive clause. 44. Considering his age, the Husband says that he would like to act cautiously in respect of his available capital and therefore he is not prepared to pursue any business venture aggressively so as to avoid the risks of losing the capital for his old age. He has therefore set up a company named A Ltd offering consultancy services and sourcing goods for other companies since it does not require a substantial amount of investment in the business. He has spent HK$9,810 setting up this company and estimates a monthly commitment of HK$3,000 of his capital to the business until it starts making some money. So far he says he has made 1 business dealing earning only HK$800. He hopes he will break even after one year but if this is not successful, he will have to think of something else. He says in the absence of employment or business profit, he has no other financial resources save his 50% of the assets and hence he is unable to pay any periodical payment to the Wife other than a nominal maintenance. 45. The Husband is now 53 and is living with his lady-friend in an apartment rented at HK$35,000 per month, which is about half of that of his former residence, and as a result he has negotiated from his former employer to meet his rental costs until February 2004. Very little is known about his lady-friend save that she is 31 years old and has her own interior design business. It appears however that apart from occasionally paying for food purchased when she is to cook, she does not contribute financially to any of the expenses of the household. With no income from his business, the Husband has been relying solely on the compensation he received from his former employer and his share of the cash under the division of the capital assets proposed, of about l costs after February 2004. 46. Criticisms have been made against the Husband about his efforts to find work for specifying in his resume that he has worked in the electronic retail industry, thereby limiting his choice given the fact that he is bound by the restraint of trade clause for 12 months from April 2003, and for stating how much his package was worth in his former job, which may affect the availability of any offer of a lower paid position, and lastly for taking a vacation in UK in June 2003 soon after he was made redundant. 47. In reply to the first 2 criticisms, the Husband says that his CV must include such information which cannot be ignored, that he would be asked anyway, and that he did state in his covering letters his willingness to consider jobs outside the electrical trade and at a lower salary despite the fact it has been his field of expertise for 25 years. As for the trip to UK, he says the trip was for 2 weeks after he had sent out his first batch of job enquiries and while awaiting responses to them, and that the copies letters and e-mails produced by him show that he was in contact and continuing with his efforts while he was away. 48. The Husband believes that a nominal maintenance for the Wife at present, with substantive maintenance if he gets a job or makes money in business is a fair and reasonable proposal in the circumstances. To alleviate the Wife s concern that he may hide his profit in the business, the Husband undertakes to furnish her with his management account of the business so she can see the money-flow every 6 months, and to notify her within 14 days if he finds a job. He says this would allay her fears that he can cook the books of the company and lives off the company while denying her any maintenance. 49. It is true that the Court must have regard to not only the income of each of the parties but also their earning capacity. This is clear in the authorities, and is specifically so provided in s. 7 (1) (a) of the Ordinance. As submitted by the Wife, this reflects the serious burden which a Court imposes upon the bread winner to use his or her best endeavours to meet his or her obligations in this regard. The fact that a husband has no immediate income is no sufficient answer to a claim by a wife for periodical payments, as in the case Munt v Munt [1983] Fam Law 81 in which the husband, who had been unemployed for 12 months and was receiving supplementary benefit, was found to be physically capable of undertaking unskilled employment, and was therefore ordered to pay maintenance to the wife for the child of the family. Similarly, in the case of Fowler v Fowler [1981] 2 FLR p 141, an unemployed husband was ordered by the Court to pay periodical payments for his wife and children when he was found to be able to deal in motor cars if he saw it fit to do so and that he was able to make a profit from such activity. 50. Having seen and heard the Husband in evidence, I believe that he has made genuine efforts to look for employment, and accept that the circumstances of his case and the present economic situation have made his search for a job so far unsuccessful. There is simply no evidence to suggest that he is avoiding work to defeat the Wife claims, and the criticisms about his efforts are not really justified. 51. It is also not certain how his recent health problems of hypertension and high blood pressure, for which he has sought treatment and is on medication, may have any impact on his future earning capacity. I do however accept that with his qualification and experience in the electronic retail field, the Husband does have substantial earning capacity, despite his present difficulties, although it is not sure when his business will start making money, nor is it possible at this stage to assess its profitability, as it is a new business without any past record upon which one may draw any inference or conclusion. 52. It is however argued by the Wife that, if the Husband s employment had continued, he would have been obliged to continue to assist her with periodical payments in an appropriate sum as the assets available are clearly insufficient for him to discharge his responsibility to support her for the rest of her life, the question before the Court is therefore whether or not it is fair that the Husband should be relieved of such obligation simply because he has temporarily lost his source of income from his employment, and her case is that, in all the circumstances, the answer to such question should be . 53. It is further argued that in addition to earning capacity, the Court must also look at all the circumstances a person s mental and physical resources, his past record, his qualifications, his capital position, his rate of personal expenses and every available financial resource, and that it is essential for the bread winner to manage his resources so as to afford his dependent with an appropriate amount of money to live on as no doubt he would have done if they had continued to live together. The onus, it is argued, lies on the payer, and that he is not allowed to sit back and say he has no income and the dependent should look after herself. 54. It is submitted that this Husband has both the earning capacity and the financial resources to meet his continuing obligation to this Wife, and that it is only fair and reasonable that the Court should require him to live up to his obligation from his resources and give him gentle encouragement to utilize his undoubted earning capacity to achieve the same, as it was said in the case of Linten v Linten (1885) 15 QBD 239, CA : One must look at the man s mental and physical resources, the money at his disposal, however it may be used, his capital position, and the rate of his current personal expenditure. I do not pretend that this list is exhaustive, but it serves to emphasise the point that the ability of a husband to make provision for a wife falls to be determined not by a cash evaluation but by an evaluation of all his circumstances and resources . 55. And in the case of Thomas v Thomas [1995 policy to pay relatively low salaries to the directors and plough back the profits. The wife had no capital and no independent source of income. At the hearing of the wife s application for financial relief the judge held that the husband had failed to satisfy him that it was beyond his power to free the primary equity in the family home by providing the bank with alternative security. He accordingly ordered the sale of the family home and payment to the wife of s one that the husband would make good by procuring changes in the company s policy towards the payment of dividends and / or the remuneration of management. The husband appealed, contending that the lump sum order was improper because it assumed without sufficient evidence that the husband could find substitute security for his liabilities, that it was premature in that if the husband had merely failed to prove a negative, i.e. failed to satisfy the Court that alternative assets were available to support the security, the judge ought to have ordered an adjournment to enable alternatives to be investigated, and the income amend amounted to a breach of the principle of self-imposed restraint on which the Court normally acted, particularly where their parties were involved, when exercising its jurisdiction. 56. On dismissing the appeal, Waite LJJ said : - The court was confronted by a husband with immediate liquidity problems but possessing substantial means. He was proposing that the court should make a capital order which would extinguish for ever all claims by the wife to capital relief from him or his estate. The order that he was suggesting was paltry when measured against his total resources and expectations, assessed in the broad terms which the Act requires. On such a husband a heavy onus lay to satisfy the court that all means of access to liquid finds to support suitable outright provision for his wife had been thoroughly explored and found to be impossible. If he failed to demonstrate that, he rank the risk of having the inference drawn against him that ways and means could be found of funding suitable provision for the wife s capital needs. The judge was in my view justified in making the order that he did in respect both of capital and of income. The evidence was in a state which entitled him to draw inferences as to the availability of funds to provide alternative security for the guarantee and for the Lloyds losses loan, and thus liberate the primary equity in the family home to provide a lump sum appropriate to the rehousing needs of the wife and children and of sufficient scale to justify shutting her out from any future capital relief. I do not accept the submission that having decided to draw those inferences it was his duty to adjourn the proceedings to provide the husband with an opportunity either of rearranging his affairs or of demonstrating that he was being asked to perform the impossible. It was common ground between the parties that although a final settlement was not yet feasible as regards income payments, any order made by the judge in respect of capital should be a final order extinguishing all future claims on either side. Against that background, and with due regard to the demands of finality in a case where the parties had accumulated costs already on an alarming scale, the judge cannot in my view be faulted for acting as he did on the material presently available to him. He was also entitled to draw the inference that capital relief on the scale he was ordering would not leave the husband homeless. His family circumstances (which it is unnecessary to describe in detail) would justifiably have left the court in no doubt that during what will undoubtedly be a difficult transitional period for him while he awaits receipt of income from his Lloyds membership and adjusts his affairs generally for the future he will be at no serious risk of being without a suitable base, even though he may be obliged to live for a time in rented or borrowed accommodation. The periodic payments order did not leave the husband destitute : it left him with a deficiency of income over expenses only so long as those expenses include the cost of private education for his sons. It is true of course that these parents are united in wishing their sons to attend fee-paying schools, but the judge was in my view fully entitled to regard independent achieve with help from his brother and mother. The judge s order certainly involved a powerful inducement to the extended family to come to the husband s assistance, but the provision of that incentive fell, in my judgment, within the bounds of judicious encouragement and lay well short of the kind of order that is condemned in the authorities as placing improper or undue pressure on their parties . Glidewell LJ, agreeing with Waite LJ in dismissing the appeal, said this : - The two practical difficulties which the husband will need to overcome to enable him to comply with the judge s order have been described by Waite LJ in the first paragraph of his judgment, which I have had the advantage of reading in draft. I need not repeat them. The question for this court is, was the judge entitled to conclude, on the evidence before him, that the husband probably would, and will, be able in practice so to arrange his financial affairs as to enable him to pay the sums he has been ordered to pay ? The matters to which the judge was required to have regard in reaching his decision are to be found, first, in s 25 of the 1973 Act. It is not necessary to set them out. It suffices to remind ourselves that, under s 25 (1), first consideration is to be given to the welfare of the two children whilst they are under the age of 18. It is also to be noted that s 25 (2) (a) requires the court to have regard as one of the eight matters listed not merely to a party s present or likely future income, earning capacity, property and other financial resources, but also to any increase in earning capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire . The judge also had, as we have, the guidance to be derived from the various authorities to which Waite LJ has referred. Those which are the most helpful in this case are, in my view, the decisions of this court in O D v O D. Where a husband can only raise further capital, or additional income, as the result of a decision made at the discretion of trustees, the court should not put improper pressure on the trustees to exercise that discretion for the benefit of the wife. The court should not, however, be misled by appearances ; it should look at the reality of the situation . If on the balance of probability the evidence shows that, if trustees exercised their discretion to release more capital or income to a husband, the interests of the trust or of other beneficiaries would not be appreciably damaged, the court can assume that a genuine request for the exercise of such discretion would probably be met by a favourable response. In that situation if the court decides that it would be reasonable for a husband to seek to persuade trustees to release more capital or income to him to enable him to make proper financial provision for his children and his former wife, the court would not in so deciding be putting improper pressure on the trustees. In relation to the facts of the present case, I would apply these principles to the family company as if it were a trust, and the shareholders (the husband), his mother and brother) the trustees. On that basis, the judge was in my judgment entitled to reach the conclusion he did . 57. In the present case there are no trustees controlling other capital or income, and the only resources from which the Husband may have to meet the Wife s requirement for periodical payment will be his share of the assets, which consists of his London flat with an outstanding mortgage, and his share of the pension investments and cash of about cumstances, have to pay to the Wife substantive periodical payment from these assets of his. It is true that whatever the Wife s earning capacity may be, the proposed 50% of the assets for her will not be sufficient to meet her future needs and expenses. It is also true that, whatever the real cause for the breakdown of the marriage, and that the decree nisi of divorce was granted on the Husband s behaviour, it is the Husband who after 30 years of marriage has decided to leave the Wife and to spend possibly the reminder of his years with another woman, who is younger and hopefully will be of support to him in his later years, both emotionally and financially. The fact that this woman has her own business means that if she is not already contributing towards the Husband s household, she will no doubt be expected to after February 2004 when the housing allowance from his former employer ceases. 59. On the other hand, although the Wife appears to have some assistance in supermarket shopping from time to time from a male friend who has also accompanied her in a recent holiday, there is no evidence suggesting any relationship between them that may lead to the kind of situation that the Husband has with his lady friend. 60. There is no doubt that the Wife is in a much more vulnerable situation, having been out of regular employment for years with no tertiary qualification, and at her age with the stress and effect of the divorce which may have exacerbated her health problems including migraine and arthritis, as well as the demands upon her in caring for her elderly and ailing parents, I accept that her needs have exceeded the proposed 50% of her share of the capital assets. 61. The Husband has recognized this by offering nominal maintenance and then substantive maintenance if and when he has income from his business or new job, arguing that if an order is made for him to pay substantive periodical payment when he is unemployed, and in the absence of income, he will never be able to vary that order as his income ll the family assets leaving him with nothing, which is wholly unacceptable as the court must be fair to both parties. 62. To achieve a fair outcome is indeed what the court is required to do to the parties. In White v White, Lord Nicholls said : - As originally enacted in 1970, in section 5 (1) of the Matrimonial Proceedings and Property Act 1970, the list of factors to be taken into account contained a tailpiece. The tailpiece declared what should be the objective of the court when exercising the statutory powers to make financial provision orders and property adjustment orders. The court was so to exercise these powers : as to place the parties, so far as it is practicable and, having regard to their conduct, just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other . This tailpiece was later deleted from the legislation, and nothing inserted in its place. In consequence, the legislation does not state explicitly what is to be the aim of the courts when exercising these wide powers. Implicitly, the objective must be to achieve a fair outcome. The purpose of these powers is to enable the court to make fair financial arrangements on or after divorce in the absence of agreement between the former spouses : see Thorpe LJ in Dart v Dart [1996] 2 FLR 286, 294. The powers must always be exercised with this objective in view, giving first consideration to the welfare of the children. Self-evidently, fairness requires the court to take into account all the circumstances of the case. Indeed, the statute so provides. It is also self-evident that the circumstances in which the statutory powers have to be exercised vary widely. As Butler-Sloss LJ said in Dart v Dart [1996] 2 FLR 286, 303, the statutory jurisdiction provides for all applications for ancillary financial relief, from the poverty stricken to the multi-millionaire. But there is one principle of universal application which can be stated with confidence. In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles . 63. In the general approach to the division of assets that fairness demands, Lord Nicholls further stated in White v White : - Sometimes, having carried out the statutory exercise, the judge s conclusion involves a more or less equal division of the available assets. More often, this is not so. More often, having looked at all the circumstances, the judge s decision means that one party will receive a bigger share than the other. Before reaching a firm conclusion and making an order along these lines, a judge would always be well advised to check his tentative views against the yardstick of equality of division. As a general guide, equality should be departed from only if, and to the extent that, there is good reason for doing so. The need to consider and articulate reasons for departing from equality would help the parties and the court to focus on the need to ensure the absence of discrimination. This is not to introduce a presumption of equal division under another guise. Generally accepted standards of fairness in a field such as this change and develop , sometimes quite radically, over comparatively short periods of time. The discretionary powers, conferred by Parliament 30 years ago, enable the courts to recognise and respond to developments of this sort. These wide powers enable the courts to make financial provision orders in tune with current perceptions of fairness. Today there is greater awareness of the value of non-financial contributions to the welfare of the family. There is greater awareness of the extent to which one spouse s business success, achieved by much sustained hard work over many years, may have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over many years, may have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over many years, may have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over many years. There is increased recognition that, by being at home and having and looking after young children, a wife may lose for ever the opportunity to acquire and develop her own money-earning qualifications and skills. In Porter v Porter [1969] 3 All ER 640, 643 644, Sachs LJ observed that discretionary powers enable the court to take into account the human outlook of the period in which they make their decisions . In the exercise of these discretions the law is a living thing moving with the times and not a creature of dead or moribund ways of thought . Despite these changes, a presumption of equal division would go beyond the permissible bounds of interpretation of s 25. In this regard s 25 differs from the applicable law in Scotland. Section 10 of the Family Law (Scotland) Act 1985 provides that the net value of matrimonial property shall be taken to be shared fairly between the parties to the marriage when it is shared equally or in such other proportions as are justified by special circumstances. Unlike s 10 of the Family Law (Scotland) Act 1985, s 25 of the 1973 Act makes no mention of an equal sharing of the parties assets, even their marriage-related assets. A presumption of equal division would be an impermissible judicial gloss on the statutory provision. That would be so, even though the presumption in England and Wales, and in respect of what assets, is a matter for Parliament. It is largely for this reason that I do not accept Mr Turner s invitation to enunciate a principle that in every case the starting-point in relation to a division of the assets of the husband and wife should be equality. He sought to draw a distinction between a presumption and a starting-point. But a staring-point principle of general application would carry a formal consequences regarding the burden of proof. In contrast, it should be possible to use equality as a form of check for the valuable purpose already described without this being treated as a legal presumption of equal division . 64. This general observation however has to be read bearing that White v White was a clean break case where the available assets substantially exceeded the parties financial needs in terms of housing and income. Where there is no clean break and that the parties needs exceed their assets, it would be useful to consider what Thorpe LJ said in the subsequent case of Cordle v Cordle [2002] 1 FCR 97, CA : - What White v White essentially decides (as this court has emphasised in the more recent decision of Cowan v Cowan [2001] EWCA Civ 679) is that it is the first duty of the court of trial to apply the section 25 criteria in search of the overarching objective of fairness. It seems to me that in search of that overarching objective in the typical ancillary relief case the District judge will always look first to the housing needs of the parties. Homes are of fundamental importance and there is nothing more awful than homelessness. So in the ordinary case the court s first concern will be to provide a home for the primary carer and the children (whose welfare is the first consideration). Of course in many cases the satisfaction of that need may absorb all that is immediately available. But, as in this case, where there is sufficient to go be sidered is buttressing the ability of one or other of the parties to work. For just as homes are of primary importance, so is the ability and the opportunity to work. It may be that as a result of the years of marriage, one or other of the parties will need some capital provision to enable him or her to get back into the labour market, or to retrain for a profession, or to modernise a skill which, through the years of marriage, has grown rusty. Beyond that, if there be cash beyond that, then the judge has to look to what in his estimation is the fair result . And in Elliott v Elliott [2001] 1 FCR 477, 479A, which was not a big money case, Thorpe LJ said : - Although in his speech Lord Nicholls of Birkenhead emphasised that any principle he enunciated was to apply only to those comparatively rare cases where the totality of the assets exceeds the needs of the parties, nevertheless his emphasis upon the need to avoid gender discrimination and the consequential need to treat equality, if not as a starting point, still as a cross-check to be applied to any provisional view formed in a court of trial is valid in a more general sense . 65. So in the case of S v S (Financial Provision : Departing from Equality) [2001] 2 FLR 246 where the assets did not exceed needs / responsibilities and where the judge in applying the White v White yardstick of equality, left the husband with slightly more assets than the wife, it seems that the resultant inequality was justified by the husband s greater needs and responsibilities. 66. In the present case the assets similarly do not exceed needs / responsibilities and that both parties will have to rely on their share of the assets while the Husband is without employment or income from his business, and although I agree with him that had the marriage continued, the Wife would have had to share in the vicissitudes of life, and hence in his present difficult situation, it would not be fair that he should have to pay substantive periodical payment for the Wife from his share of d assets. 67. I am conscious that this is not numerically precisely 50% of the value of the assets as originally proposed by the parties, but in applying the yardstick of equality, I believe that this arrangement will in all the circumstances of the case achieve fairness to the parties. While it may not bring closure to the parties dispute by leaving it open to future review of the Husband s ability to pay substantial maintenance for the Wife in perhaps 12 or 18 months, this is inevitable whenever there is no clean break between the parties, and I honestly believe that this Husband, with his experience and qualification and given time, will be able to turn his present difficult situation around by start bringing in income from his business or landing a new job, in which case I expect him to, and I have no reason to doubt him, inform the Wife and to make a reasonable provision by way of monthly maintenance for her. 68. Lastly there is always the difficult question of costs. Having taken into account of the Husband s contribution always made to the Wife as to her costs, in the circumstances of this case I believe that it would be appropriate for the parties to bear their own costs. Accordingly and upon the Husband undertaking to furnish to the Wife with the management accounts of his business every 6 months and to notify her within 14 days of his finding employment, I order that : - The Husband shall upon the decree absolute : - (i) transfer all his share and interest in the Huddersfield property to the Wi t of and incidental to the ancillary relief proceedings, which is an order nisi to be made absolute at the expiration of 14 day Bruno Chan District Judge Representation : David Pilbrow instructed by M/S Hampton Winter & Glynn for the Petitioner. Francis Irving instructed by M/S Stevenson Wong & Co. for the Respondent. 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