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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Beighton v Beighton [2005] EWCA Civ 1100 (28 July 2005) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2005/1100.html Cite as: [2005] EWCA Civ 1100

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM BIRMINGHAM COUNTY COURT
(HIS HONOUR JUDGE BELLAMY)

		Royal Courts of Justice Strand London, WC2
		28 July 2005

1. MRS JUSTICE BLACK: This is an application by a wife, Mrs Beighton, for permission to appeal against an order of His Honour Judge Bellamy made on 8 March 2005 in relation to ancillary relief proceedings. Judge Bellamy had himself been hearing an appeal from the order of District Judge Cleary on 30 September 2004 after a four-day ancillary relief hearing.
2. Mrs Beighton represents herself today and has done so very ably. But the points that she wants to take are quite technical points, and she has told me that she hopes by the time this matter comes back before the court in due course, as I am going to order, to be able to have obtained enough money to instruct a solicitor to assist her. That would indeed be of the greatest help to her and I hope that that is possible. I dare say it will be of assistance to the court as well.
3. She has, of course, in seeking to persuade the court to give permission, a steep hill to climb because this is a second-tier appeal, there already having been one appeal to the county court judge. Section 55 of the Access to Justice Act 1999 governs the position. In order for permission to be given the Court of Appeal has to consider that the appeal would raise an important point of principle or practice, or that there is some other compelling reason why permission should be given.
4. The parties were married in 1966. They separated in 2001 after a 35-year marriage. There are three children of the family, all of them now grown up. Mrs Beighton is 65 now and her husband 59. She has continued to live in the former matrimonial home since the separation. That, at the time of the proceedings, had an agreed net value of £795,400. Her husband has formed a new relationship and is living with his new partner in her property. The other major asset of the family is a company called TG Beighton Ltd. That was set up by the husband during the marriage in 1974. It was valued by a single joint expert at £1,000,134. There was also a company pension fund. In that the husband had an entitlement and the wife did not. He also had two external pension policies and the wife had one of her own. The parties were agreed that there would be an equalising of the pensions by means of a pension-sharing order.
5. There were a number of other assets. They were comparatively minor, although they did include a yacht, which had a total value of £140,000, it seems.
6. The district judge's order, putting it very simply, made the following provision. First, the husband was going to transfer the former matrimonial home to the wife, and also half of his shares in their son's building company, Building Dynamics Ltd. That was a company in relation to which the total shareholding of the parties was worth £25,000. Secondly, the wife would resign as a director of TGB and there would be a variation of the trust which held the shareholding of all the family members in that company, the son, the wife and the husband, so that the wife would be removed as a trustee and a beneficiary, and the result would be that the company would become the husband's. He would pay a lump sum to the wife of just over £58,000 and she would receive periodical payments of £3,500 per month which would go up with the retail prices index each year.
7. I have, unfortunately, not seen the judgment of District Judge Clarey. I am not quite sure how that has happened. It is obviously a very important document and it was an omission which could not be remedied in the short time that is available today. When this matter comes back it is very important that a copy of that document is supplied.
8. The judge who heard the appeal from District Judge Clarey had appeals both by the husband and the wife before him. He did alter the order of District Judge Clarey by substituting variations which were favourable to the husband and not to the wife. In other words she lost her appeal to the circuit judge. He reduced the lump sum to nearly £24,000 and he imposed fixed term on periodical payments order, so it would last only for five years. It would end, therefore, in March 2010, although the judge did not impose an absolute cut-off at that point.
9. The wife complains that both the circuit judge and the district judge were wrong in their conclusions on the first instance hearing and the appeal. She wants to attempt to persuade the Court of Appeal, therefore, that both the judge and the district judge were wrong in their approach to her case.
10. The facts found with regard to the company by the district judge seem to be the following. Acting as they thought at the time for tax planning reasons in 1999 but without independent advice (about which the wife complains), the wife and the son transferred their shares in TGB to the husband. Before the transfer the husband and wife both had 35 per cent shareholding and the son 30 per cent shareholding. A hundred per cent was therefore held by the husband after the transfer, and he in turn transferred that shareholding into a trust. The trust then owned the entirety of the shares. It seems that the husband and the wife were trustees, but the entirety of the income seems to have been earmarked for the husband for life. The intention seems to have been that the capital was thereafter to be passed to the children.
11. The district judge took the view that it did not ultimately matter that this looked suspicious, possibly, because his view was that the shares remained in family control and the trust could therefore be varied by the divorce court. It is to be remembered that the company was the only major asset that the parties had other than the former matrimonial home. It had been the product of the husband's flair and ability and hard work, but had been produced during the course of the marriage. It seems that it must have been conceded that the wife had herself made a significant contribution to that marriage, albeit in a different form, because the parties were agreed that the attempt that the judge should make was to divide their assets equally following from the divorce.
12. It appears that the husband's practice had been to drain the company's resources so that the value by the time of the ancillary relief proceedings was reduced only to the value of the goodwill, and that in itself had a significant association with the husband himself and his efforts and hard work. He, however, wanted to retire. He had appointed new directors. The wife complains that this was not in consultation with her, and that the husband did not in fact have power to do that or to remove her as a director of the company. What he intended to do was to give those directors 40 per cent of the shareholding in the company over a period of five years ending in August 2006 in recognition of the efforts that they would put into the business.
13. The district judge found that the husband had been searching for an exit strategy since 1999 or 2000, and that indeed it was arguments about that strategy that had finally brought the marriage to an end. He rejected the argument that there was anything sinister about this on the husband's part. He found that the husband would get value for the shareholding. At that stage it was thought that it would be £160,000 per annum for consultancy work and in relation to the shareholding which would last over five years, and of course the husband would continue to draw a share in the profits by virtue of the 60 per cent shareholding. In looking at the matrimonial assets he reduced the value of the company by the 40 per cent of which the husband would divest himself so that the company was valued £612,000, rather than just over £1 million. He considered that the wife's wish for a 50 per cent shareholding that would lead her to have an income of her own, as well of course as capital, was unworkable in view of the relationship between the parties, and understandably he felt that there needed to be a separation in that respect as well as in their matrimonial affairs.
14. The parties having agreed that the assets should be divided equally, the district judge found the total pot to be approximately £1.8 million, given his view about TGB. He did not subtract debts from that because he thought that the parties were the authors of their own misfortune. (That approach was altered by the judge later on to an extent). He was looking therefore for each of the parties to have approximately £900,000, and he achieved that by the wife keeping the house, having half the shareholding in Building Dynamics and a lump sum of £58,000. He rejected the clean break argument which the wife had only wanted on the basis that she was going to get a half share holding in TGB, which of course she was not under the district judge's order. He found that she had no earning capacity but she did have a State pension and her own pension, plus the pension that she would acquire from a split of the pension entitlement of the husband. That would be £16,500 private pension, the district judge thought, and £5,500 State pension.
15. He then looked at the wife's reasonable needs which he thought would be about £48,000 p.a. minimum, and if she went on with her hobby of husbanding horses then that would bring the expenses nearer to £68,000. He actually made a small discount to £64,000 per annum. That meant, net of pension, the wife needed to be found £42,000 and that is how he arrived at £3,500 a month periodical payments. He did not assume that the wife either would or should sell the former matrimonial home and therefore did not attribute any income to that capital. The husband would in contrast, on the district judge's view of things, have net £123,800 p.a. before he paid the wife and before he got profits or pension. He would therefore have been significantly better off in income terms than the wife.
16. The judge looked at the district judge's conclusions and took the view that the district judge had been entitled to form the view that the retirement plans were genuine, fair and reasonable. I think Mrs Beighton would disagree with that and would seek to persuade the Court of Appeal that that was the wrong approach.
17. The judge went through district judge's judgment and both parties' arguments with care. He did accept that, as I have said, there was substance in the criticism of the district judge's treatment of debts. That was a criticism coming from the husband, and he made an adjustment because of the value of the yacht which had turned out to be half owned by Ashley and therefore needed to be reduced in value from £140,000 to £70,000. The judge accordingly reduced the wife's lump sum to take account of his re-doing the maths in that way.
18. His judgment then includes a detailed consideration of the income position. It appears that that may have been a different approach from the district judge's (although as I have said, I have not seen the district judge's judgment) in that the judge concludes as part of his reasoning that the former matrimonial home should be sold and that the capital from that would then generate an income for Mrs Beighton, and he took that into account.
19. There is much concentration in the judgment on Mrs Beighton's budget, and the judge looks very much as if he was taking a reasonable needs approach. There may be an argument, it seems to me, that the reality of that was failing to recognise that the parties were striving for equality and that the husband's income was deriving in significant part from the part of the company of which he had divested, or was intending to divest, himself and the family. That had reduced the capital assets by £400,000, as the judge explicitly recognises. But the consequence of it was that the husband was going to receive a figure of enhanced income.
20. There is now some doubt after Mrs Beighton addressed me this morning about the precise figure that the husband is going to receive or has been receiving by way of enhanced income. From what she tells me it appears as if the shareholding has not in fact been transferred to the people that the husband intends should take the company over, but that they have been receiving a share of the profits of the company as if they had had that shareholding transferred. It is also unclear as to what portion of the £160,000 in fact relates to the shareholding transfer and what portion to the husband's continuing efforts in working in the company in a consultancy role. There is some suggestion from Mrs Beighton that perhaps £100,000 per annum is what relates to the intention of the shareholding having been transferred and the rest to his own efforts.
21. The question that arises in my mind is the extent to which the wife should have been given a half share of that income which in fact represented the parties' capital. The shareholding was notionally transferred to the directors. Whilst recognising that very clearly in paragraph 72 of his judgment, nonetheless the judge adopted what appears to be much more of a reasonable needs approach. There may also have been, it seems to me, an inconsistency in the judge's approach where he imposes a five-year fixed term basis on his forecast that Mrs Beighton could save from the income that she was provided in her maintenance and thereby make herself self-sufficient. It may be that that does not recognise sufficiently that the income was in itself another form of capital division rather than simply an income issue. The husband now, it seems, has an open-ended entitlement to continue to receive money from the company, although it may be that that is an impression which is corrected when he has had an opportunity to put his side with regard to this.
22. The question, therefore, that arises in my mind is whether the imposition of £3,500 per month by way of maintenance for a five-year period is sufficient recognition of the reality that the husband's income in significant part was going to derive for some years from a commutation of the parties' capital in the form of the shareholding in TGB, and whether the judge's approach in fact erred too much towards the reasonable needs approach rather than achieving the equality which he and the district judge had both striven for.
23. I am unable to say with any confidence whether the wife will be able to develop these points to get over the hurdle of permission to appeal. Two points it seems to me are important. First, that whoever gives final consideration to this question of permission should have the judgment of District Judge Clarey in advance and the opportunity to consider that. But secondly, I think that the next judge would be much assisted by the oral hearing, which is what I am going to order, being adjourned on notice to the husband so that he can ensure that there are no misunderstandings which would ultimately be fatal to the appeal. It is very important that if there are they be picked up at this early stage. So I propose to adjourn this matter to an oral hearing on notice to the husband of the permission application. I am going to list it to last for an hour and a half.

(Application adjourned on notice; no order for costs).