Matrimonial – application for interim maintenance sought by the
husband.
[2016]JRC223B
Royal Court
(Family)
5 December 2016
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Before :
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Judy Marie O’Sullivan, Registrar,
Family Division.
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Between
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S (the wife)
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Petitioner
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And
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T (the husband)
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Respondent
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IN THE MATTER OF S-v-T (MATRIMONIAL)
AND IN THE MATTER OF MATRIMONIAL CAUSES
RULES 2005
Advocate S. C. Thomas for the Petitioner.
Advocate B. J. Corbett for the Respondent.
reasons
the registrar:
1.
This is an
application by the respondent husband for interim maintenance. He seeks
£4,500 per month until the conclusion of financial proceedings. The petitioner wife maintains that the
husband has failed to demonstrate his need for interim maintenance and
therefore requests that the application be dismissed.
Background
2.
The
parties married in 1995 and separated in 2016. The husband is 54 years old and wife 56
years old. There is one child of
the parties, A, who is 19. The
husband moved out of the former matrimonial home in May 2016 - there is a
dispute about the reasons for this- and the husband moved to England, taking a
tenancy of a property in England in July 2016. The wife commenced divorce proceedings
in June 2016 on the basis of the husband’s unreasonable behaviour. The husband chose not to defend the
divorce but denied the particulars of unreasonable behaviour and in August 2016
filed behaviour particulars he chose to accept. It is understood that having been viewed
as defended and the matter going before the Deputy Bailiff to then be
adjourned, the divorce proceedings will now proceed on an undefended
basis. As no application for a
Greffier’s certificate on an undefended basis has yet been applied for,
it is unclear when a Decree Nisi will be pronounced.
3.
Affidavits
of means and documents in support are due to be exchanged by the 16th
December, 2016, and there is due to be a Case Review Hearing on the 27th
March, 2017.
The husband’s financial circumstances
4.
The
husband received £250,000 from the wife after 19th December,
2014. The husband maintains that he
received this sum for assisting the wife in her business but this is denied by
the wife who says it was a gift.
After the wife sold her company, Company B, to Company C, the husband
was engaged by the purchaser, Company C, on a six month consultancy contract at
a rate of £7,500 gross per month for six months. He therefore received an additional
£45,000 gross, which nets down to £36,000 after tax. In addition the husband received
£21,448.72 from J Lawyers Client Account on 19th December,
2014, from Company D understood to be as “back
payment of salary.” The
husband therefore received a total of around £307,448.72 from December
2014. It was submitted by the wife
that he had assets prior to this as well.
As no documentation has been provided it is not possible to verify what
the husband’s financial position actually is. However Advocate Thomas said he has no
immediate need for income; Advocate Corbett submits his need for income is
immediate.
5.
It appears
to be the husband’s case that £250,000 has been spent save that he
currently has £91,000 in a Jersey account and £3,000 in a UK
account. He has paid rent in
advance until June 2017 amounting to £28,661.92 on a property
(“Property E”) in England, he has paid some Legal fees (May –
August 2016) of £23,150.62 and he enrolled on a course paying fees of
£15,240. However he now says
he is paying the latter on a monthly basis. He has paid debts of £15,000,
bought a motor bike for an unstated amount, bought furniture for an unstated
amount, purchased a second hand car for an unstated amount, paid removal costs
from Jersey for an unstated amount and paid for general living expenses for an
unstated amount. No documentation
has been provided. According to the
wife he already owned a number of cars and motorbikes. He is in a relationship but I was not
told he is cohabiting. The wife
contends he has funds previously held in investments with Company F, and
Company G and at March 2015 in bank accounts and may still have a variety of
ISAs, bank accounts, bonds, post office funds, premium bonds and
shareholdings. As disclosure has
not been provided I am unable to say whether this is indeed the case but, the
husband‘s advocate did not specifically dispute this aside from saying
that as he had sworn an affidavit the Court could rely on the matters in his
sworn document.
6.
I am told
the husband has no income and is on a course. The wife’s advocate submitted that
he has chosen to embark on this course rather than seeking employment, even
though he puts himself forward as commercially astute. He said the husband has chosen not to
earn money. He is due an army
pension but this will not become payable for six years. Advocate Thomas questioned why he had
not produced any evidence of his expenditure. Advocate Thomas submitted that he had
enrolled on the course in the autumn knowing what his resources were and with a
timetable already having been set for ancillary relief, so the presumption was
he could cope financially. Advocate
Corbett stated that his Form 16 was filed in August 2016 and did indicate he
was seeking interim maintenance. It
was submitted on behalf of the wife that he was offered the chance to live in a
property in England close to his family.
The wife is sceptical that he has paid his rent of nearly £29,000 rent
in advance for Property E in England, the rental of which was £2,150 per
month. Her contention is that it is
not how the rental market operates; he has provided no evidence beyond his bare
assertion that he was required to enter into what would appear to be an
uncommercial arrangement. In
addition it was submitted on her behalf that the cost of the property would
appear to be inconsistent with similar properties on the same street and this
does appear to be the case. If he
has so paid, and his affidavit says he has done so, then clearly any rental
payments do not need to be taken into account as part of his overall
expenditure. Advocate Corbett said
that the property is a “reasonable”
size compared with the 7 bedroom property in which the wife is living. The husband says he has not maintained
his standard of living but at the same time has not got a student lifestyle. The husband contends that in any case he
was “required” to leave the
former matrimonial home.
7.
With
regard to the course, it was only when questioned that Advocate Corbett said
that the husband has been offered a training contract with a Jersey firm
commencing in the summer/early autumn of 2017 in Jersey, but no documentation
was provided about this. He had
already done a professional course so when asked why he needed to do the further
course as well Advocate Corbett said that the course was of more use for a
Jersey firm as it gives back office skills. The husband has experience of commercial
life. He has a firm offer but is
receiving no financial assistance from the firm concerned. The wife’s advocate submitted that
a degree of scepticism was needed not only about why he embarked on a course,
but whether he actually had an offer of a training contract – the name of
the firm was not provided - and as to the amount of capital he says he has
left.
8.
The
husband is not claiming interim maintenance to cover his legal costs. It is submitted that his legal fees are
high due to the conduct of the wife as she refused to accept his Form 4
statement that he was not defending the proceedings. Advocate Corbett asked for an order of
£3,690.50 in respect of legal costs regarding the defended proceedings. However the matter before me is interim
maintenance. Various other matters
were raised by Advocate Corbett such as the wife hiring a private detective, a
large amount of correspondence, issues regarding Hildebrand rules and the wife,
the husband says, threatening to “destroy”
him. These are not issues for the
interim maintenance hearing but the husband is apparently concerned that his
capital will be depleted by rising legal costs, and the matter in respect of
sorting out ancillary relief will be delayed by the wife. Whether this is or is not the case, I am
sure I do not need to remind the parties of Rule 47 of the Matrimonial
Causes Rules 2005.
9.
I was told
by Advocate Corbett that the husband is due £54,500 held by J Lawyers and
was referred to a lengthy e-mail dated the 12th October, 2016, from J
to the lawyers for the husband and wife.
Advocate Thomas submitted that the wife is beneficially entitled to the
money. In the e-mail it states
however, “that the true destination
of the funds would need to be resolved as one of the assets in connection with
the divorce.” I do not
propose to deal with this as the hearing before me is for interim maintenance.
10. The husband has provided a schedule showing
expenditure of £12,503 per month but is claiming £4,500 for interim
maintenance. The wife, in her affidavit
sworn on the 21st September, 2016, analyses at paragraphs 42 to 47
his schedule of expenditure and considers he only requires £2,428 per
month on an interim basis excluding legal fees.
The wife’s financial circumstances
11. The wife accepts that she received
£22,885,915 when she sold Company B to Company C. 50% of the net proceeds in shares were
held in restricted stock that do not vest until the 19th December,
2016, and she does not have access to them until the end of January 2017. The capital has funded family outgoings
and £2.245 million was used to clear debts including on the former
matrimonial home. However the
majority of the money has been invested and she has capital available of
£3.2 million. She accepts her
income needs may seem high but the commitments are used to fund her stud farm,
properties and care needs for their 19 year old son and her mother.
In the court bundle was an Income statement
dated September 2016 provided by Smith & Williamson which states that they
calculate that going forward:-
“her monthly outgoings
will be £51,193.26. If you incorporate capital expenditure (i.e.
improvements to properties, purchases of property, purchases of horses, etc)
her current average spend is between £100,000 to £150,000 a month.
We have not calculated S’s
spending on living costs (Food/Clothing/Transport) as this is currently being
funded through capital.
Furthermore, S’s main
source of income will cease in January when she leaves H Limited.”
The wife has an income of £17,752 per
month but her outgoings are £69,511 so there is a deficit of
£51,758 per month. The
figures do not include her own personal needs and her capital is needed to meet
the difference. Her employment with
Company C ends in January 2017 and she will then receive a salary of
£15,461 per month. However,
in February 2017 her income will, she says, reduce to nil. She does not know until 2017 whether she
will receive a further dividend from Company C. She has provided a list of her personal
expenditure amounting to £18,497 which includes for A and her mother,
both of whom live with her.
12. Advocate Corbett submitted that one should take
an overall view of the wife’s circumstances as she has significant
capital of about £20 million compared with the husband’s
£100,000. She says the
wife’s living expenses are met.
Advocate Thomas accepted that the wife does have more resources but he
submitted that she has properties and interests that require investments, such
as the stud farm that cannot generate income from a standing start, her income
generation does not cover her running costs and her living costs are funded
through capital. He stated that the
test is not who has more but whether there is an immediate and urgent need for
maintenance.
The Law
13. Article 31 of the Matrimonial Causes
(Jersey) Law 1949 states as follows:-
“Contributions for support;
interim orders[57]
On any petition for divorce,
judicial separation or nullity of marriage, the court may, if it thinks fit, by
interim order direct one party to the marriage to pay to the other party to the
marriage such sums for the maintenance and support of that other party as the
court thinks just, and any such interim order shall remain in force until it is
rescinded by the court or until the court makes a definitive order in respect
thereof or until the relief sought in the petition is refused.”
14. In In The Matter of XX [2010] JRC 115C
the Registrar referred to the following passage from Rayden and Jackson 18th
edition, paragraphs 16.17 and 16.18:-
“The court has an unfettered
discretion to award such sum as it thinks reasonable. There is no hard and fast rule, and no
fixed proportion: each case depends on its own facts. It has been said that the approach to
maintenance pending suit should be empirical, and that in the ordinary sort of
case the district judges who deal with these applications will have to take a
broad view of means on the one hand and income on the other and come to a
“rough and ready” conclusion, or take a “broad brush”
approach. The overriding
consideration is the actual needs of the parties pending suit. Although the provisions of s 25 of the
MCA 1973 are expressed to arise only when the court is deciding whether to
exercise its powers under s 23, 24 or 24A, the court may nonetheless have
regard to the criteria listed in s 25 on an application for maintenance pending
suit.
In practice, as oral evidence is
rarely given, it will be unusual for the court on an application for
maintenance pending suit to be in a position to make findings of fact on issues
in dispute sufficient, for example, to deal with conduct or allegations of
non-disclosure. However if it is
demonstrated that the paying party has not performed his duty to make full and
frank disclosure of his financial resources, then the court can take a broad
and robust view of his means, and it does not have to accept and proceed on the
basis of the assertions of the paying party as to his means and an inability to
pay. The court can look at the
reality of the situation and take into account voluntary funding from third
parties. Any under provision or
over provision in the order for maintenance pending suit can always be
corrected when the account comes to be taken at the substantive hearing when
there every opportunity to do fairness by set-off. The court has the power to vary,
discharge, suspend and revive an order for maintenance pending suit.”
The Registrar specifically emphasised the
statement that:-
“The overriding consideration
is the actual needs of the parties pending suit”
and went on to say that:-
“in considering “the actual needs” it seems
to me that I should look at all the circumstances of the case. So, I have
briefly considered the capital resources available to each party, not in
detail, as I will have to do at a later stage, when I will have to consider the
appropriateness (or otherwise) of a capital “clean break” between the parties.”
15. Advocate Corbett emphasised one of the reasons
the husband needs interim maintenance is because his capital is being
depleted. In the case of In The
Matter of XX, the Registrar said he had considered the capital resources
available, although not in detail and the wife had over £1,000,000
available with the husband a little less than £300,000. The Registrar said he:-
“was attentive to the position that capital should be so far as
possible preserved pending suit and neither party should be obliged to live off
capital if that can be avoided.”
He made a child maintenance and school fees
order. The wife was undertaking a
university course. Both the husband
and wife were substantially funded by a third party and the Registrar only made
nominal order as if he were to have ordered spousal maintenance in addition,
the husband would have paid 39% of his net income.
16. Does the wife in this case have sufficient
income to fund a maintenance pending suit order, as if so:-
“it may be appropriate to
make such an order in order to avoid the applicant having to service day to day
needs by resorting to matrimonial capital assets which ought to be preserved
pending the making of the final ancillary relief orders.”
17. In the case of In The Matter of ZZ
[2010] JRC 134A the Registrar cited the following passage from TL-v-ML and
Ors (Ancillary Relief: Claim against assets of extended family) [2006] 1
FLR 1263. Indeed several Jersey
cases concerning the criteria to be applied to Maintenance pending suit cases
refer to the decision of TL-v-ML:
“The sole criterion to be
applied in determining an application for maintenance pending suit was
‘reasonableness’, which was synonymous with ‘fairness’.
A very important factor in determining fairness was the marital standard of
living, although that standard of living did not need to be replicated. In
every maintenance pending suit application there should be a specific
maintenance pending suit budget, which excluded capital or long-term
expenditure more appropriate for consideration at a final hearing. That budget
should be examined critically in every case to exclude forensic exaggeration.
Where the affidavit or Form E disclosure by the payer was obviously deficient,
the court should not hesitate to make robust assumptions about ability to pay.
The court was not confined to the mere say-so of the payer as to the extent of
his income or resources. In such a situation, the court should err in favour of
the payee.”
18. Nicholas Mostyn QC as he then was said:-
“From these cases I derive
the following principles:-
(i) The sole criterion to be applied
in determining the application is “reasonableness, which to my mind is
synonymous with “fairness”.
(ii) A very important factor in
determining fairness is the marital standard of living. This is not to say that the exercise is
merely to replicate that standard.
(iii) In every maintenance pending suit
application there should be a specific maintenance pending suit budget which
excludes capital or long term expenditure more aptly to be considered on a
final hearing. That budget should
be examined critically in every case to exclude forensic exaggeration.
(iv) Where the affidavit in Form E
disclosure by the payer is obviously deficient, the court should not hesitate
to make robust assumptions about his ability to pay. The Court is not confined to the mere
say-so of the payer as to the extent of his income or resources. In such a situation the court should err
in favour of the payee.”
19. Advocate Corbett said the husband is only
asking for £4,500 per month although his expenditure as scheduled is for
£12,503 per month. I am
required to look at the figures in terms of reasonableness, bearing in mind
their previous standard of living.
In paragraph 80 the approach the Court has
to take into account:-
“the income, outgoings and
needs as they appear at the time, and make an order that will tide the
applicant over until the final hearing without causing undue hardship to the
parties.”
20. In the case of C-v-S [2003] JRC 104, an
appeal from the Registrar, the then Deputy Bailiff Birt said as follows:-
“We accept that orders of
this nature should not be made in the ordinary case. They should be reserved for those cases
which are of such complexity or where there are circumstances which for other
reasons are so unusual that there is a real risk of the wife (and it is usually
the wife) being unable to put forward her best case with equality of arms
unless the order is made.”
21. It should be noted however that that the case
of S v C concerned monies sought for ongoing legal costs. It should also be noted that the
Registrar had made an order by consent which included monies for the rent of a
property, £2,000 interim maintenance for the wife, child maintenance and
school fees, the sums totalling £86,192 per annum. The dispute was only as to the legal
fees element of the order; the husband in this case is not seeking monies for
legal costs.
22. In K v P [2009] JLR Note 42 it was held
that:-
“Interim maintenance was
normally awarded in cases… in which a party to divorce proceedings had an
urgent and immediate need for money to seek alternative accommodation,
buy food or maintain children until the final order in ancillary relief
proceedings (4(1) Butterworths Family Law Service, para 1366 at 731)” (emphasis added)
However Advocate Corbett pointed out that
it was also held that:-
“Although, in purely
mathematical terms, the wife had sufficient funds to manage until the final
hearing and was not in urgent need of financial support, she had left the
former matrimonial home at an undoubted financial disadvantage and an award of
interim maintenance was for in the circumstances.”
Advocate Corbett submits that he left the
former matrimonial home at a financial disadvantage and he has an immediate
need for money.
23. In BD v FD [2014] EWHC 4443 (Fam) Moylan
J stated, at paragraph 28:
“I would endorse, indeed
emphasise, the word “immediate”. The purpose of the section is to
give the court the power to address income needs which cannot await the final
resolution of the substantive claims either by agreement or court determination.”
24. In the BD v FD case, the husband had
non-trust assets of £49 million.
The wife had resources of her own including £1.4 million in cash
and investments. The husband had income
of about £1.7 million per year but a significant proportion was retained
to meet expenditure and re-investment.
The husband was offering £202,000 global maintenance but the wife
said he should pay £270,000 per annum although she actually wanted
£392,000 per annum. The
husband had previously agreed he did not expect the wife to use the £1.4
million to fund her legal costs and living expenses. The wife in her budget was looking for
monies for holidays and weekend breaks; clothes, shoes and jewellery; and
outgoings restaurants and entertaining which was submitted by the
husband’s counsel to
“bear no reflection to
expenditure incurred by the family during the marriage.”
And he further submitted that she was
seeking
“not a material change
from the marital standard of living but a transformation from it.”
25. Reference was made to the summary made by
Nicholas Mostyn QC as he then was in the TL v ML case referred to
above. Moylan J ordered that
maintenance be paid at the rate of £202,000 per annum as he considered
there had been forensic exaggeration by the wife and the sum paid by the husband
enabled her to meet reasonable interim income needs.
Decision
26. The husband does have some capital and will be
utilising at least part of this towards ongoing legal costs. Capital should be preserved if at all
possible and neither party should be obliged to live off capital if this can be
avoided. I have noted in the BD
v FD case the wife had capital of £1.4 million, but was awarded
global maintenance for herself and her children. Advocate Thomas accepted the wife has
more resources than the husband but asked if there was an immediate and urgent
need for income.
27. What is the reality of the situation and is it
fair that interim maintenance should be awarded? The husband is on a course which it was
submitted will provide him with employment at the end of it, but is not earning
at present. He does have an
immediate need to buy food, pay for utilities, clothing, some travel expenses,
and some personal and miscellaneous expenditure. The wife has calculated his immediate
needs at £2,428 per month rather than the £4,500 per month for
immediate needs sought by the husband. The husband does not provide a figure for
paying the course by instalments, having previously stated it was paid up
front. Included in the
husband’s schedule of expenditure on housing is a figure for rent of
£2,150 per month although in the body of his affidavit at paragraph 19 he
stated he paid one year’s rent up front from June 2016 to secure the
property. I have taken his costs
listed under ‘housing’ in his schedule at £604 which is all
the items he specifies except rent, a figure with which the wife agrees. For ‘housekeeping’ I have
deleted the replacement items of £1,000 per month as this is not for
immediate needs and reduced his overall expenditure to £650 per month to
include a reduction in the alcohol bill.
The figure of £200 per month for clothing and footwear seems
reasonable. The wife says he only
needs £360 per month for spending on his cars and motorbikes, claiming
that he has not been using his car, whereas he claims £835 to include
£75 of taxis. I am reducing
this to £745 per month as he does need some money for transport. It is accepted that £50 for
insurance is reasonable. With
regard to personal expenditure, the husband claims he spends £358 per
month but the wife considers an interim figure of £160 is reasonable, and
notes he claims for lunches but also for meals out. I am reducing the figure to £290
to partially take this into account.
The husband provides a figure of £1,400 on holidays and
entertainment. I note that the wife
is prepared to accept £500 as being reasonable in respect of holidays and
entertainment which I consider is reasonable on an interim basis. As for ‘miscellaneous
expenditure’, the husband specifies a figure of £5,136 to include
legal fees of £4,500. The
wife considers £154 as appropriate but I am prepared to accept
£536, excluding the figure for legal fees and “other”. This gives a total of £3,575 per
month.
28. Can the wife afford to pay £3,575 per
month until finalisation of the ancillary relief claims? I accept that her accountants say that
notwithstanding an income of £17,000 per month she has a deficit each
month and her spending on living costs is being funded through capital. However her financial situation is
significantly better than the husband’s, and in all the circumstance I
consider it fair and reasonable that the husband should be awarded £3,575
per month by way of interim maintenance until further order.
Authorities
Matrimonial Causes Rules 2005.
Matrimonial Causes (Jersey) Law 1949.
In
The Matter of XX [2010] JRC 115C.
Rayden and Jackson 18th edition.
In
The Matter of ZZ [2010] JRC 134A.
TL-v-ML and Ors
(Ancillary Relief: Claim against assets of extended family) [2006] 1 FLR
1263.
C-v-S
[2003] JRC 104.
K
v P [2009] JLR Note 42.
BD v FD
[2014] EWHC 4443 (Fam).