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Jersey Unreported Judgments |
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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> G -v- H (Matrimonial) [2016] JRC 091 (29 April 2016) URL: http://www.bailii.org/je/cases/UR/2016/2016_091.html Cite as: [2016] JRC 91, [2016] JRC 091 |
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Before : |
T. J. Le Cocq, Esq., Deputy Bailiff, and Jurats Liston and Blampied |
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Between |
G |
Petitioner |
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And |
H |
Respondent |
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IN THE MATTER OF G-v-H (MATRIMONIAL)
Advocate D. J. Benest for the Petitioner.
The Respondent appeared in person.
judgment
the deputy bailiff:
1. This is an appeal by G ("the Petitioner") against an order made by the Registrar on the 18th November, 2015, ("the Order") dealing with the matters ancillary to the divorce between the Petitioner and H ("the Respondent").
2. In setting out the background, we draw upon the background as set out in the reasons given by the Registrar on the 2nd November, 2015, underpinning the Order ("the Registrar's Reasons") as follows:-
(i) The Petitioner and Respondent were married on 13th August, 2005. They have no children together although the Respondent has two children from a previous marriage. They lived at Property 1 ("Property 1") which was rented from the Petitioner's parents.
(ii) After the marriage the Petitioner worked for a plumbing company, G Ltd ("G Ltd") which he owned and the Respondent owned and worked for H Limited ("H Ltd") a family run business established in 1994. H Ltd acts as retailer and installers of fireplaces, stoves and range cookers. Some years later H Ltd acquired G Ltd for which the Petitioner was to receive one share in H Ltd ("the H Ltd Share") and a loan account of some £58,000 in the accounts of H Ltd.
(iii) The ownership of H Ltd is now in dispute. Prior to the breakdown of the marriage the income of both the Petitioner and Respondent derived from H Ltd. The Petitioner did a great deal of practical work and the Respondent dealt with the finances both of H Ltd and the family.
(iv) Problems arose in the marriage and on 5th April, 2015, the Respondent told the Petitioner that she needed a break for a period. The Petitioner, who suffered from depression, on the same day drove his car at high speeds intending to take his own life. Again, on 11th April, 2015, the Petitioner attempted to take his life through carbon monoxide poisoning as a result of which he was admitted to hospital. The Petitioner had not worked between that time and the date of the Order. He was signed off and was seeing the community psychiatric nurse on a regular basis. The Respondent did not return to live in Property 1 and the Petitioner and Respondent have not lived together since 5th April, 2015.
(v) The Respondent continues to manage H Ltd although at the time of the Order she was suffering from stress as a result not only of the family proceedings but also as a result of the downturn in the business of H Ltd.
(vi) The Petitioner continues to reside at Property 1and on 26th May, 2015, he filed a petition for divorce and an application for ancillary relief on 3rd June, 2015. The decree nisi was issued on 17th June, 2015.
3. Save as is set out hereunder, there is no dispute about the assets of the Petitioner and Respondent which are:-
(i) An interest in a property in Brittany known as "Property 2" ("Property 2") owned by the Respondent's mother. It was not in dispute that an agreement had been reached between the Petitioner and the Respondent and the Respondent's mother that the Petitioner and the Respondent could purchase Property 2 for £137,000 payable in instalments and that ownership in that property would be transferred to them after payment of the final instalment.
(ii) An equal interest in A Limited ("A Ltd"), a company formed in January 2015 which commenced trading in April 2015 as a gift and craft shop. The balance sheet as at 17th December, 2015, showed a director's loan account of £13,108.61.
(iii) H Limited.
4. There is also a material dispute as to the extent of the assets in that the Respondent maintains that there was a similar arrangement in place for Property 1 as existed for Property 2.
5. The Order, in so far as it is subject to appeal, is in the following terms:-
"1. The respondent shall within four years of the date of the order dated 18th November; pay to the petitioner the sum of £29,102.11 ("the Award");
2. The petitioner (sic) shall be entitled to pay the Award by instalments as and when she can afford them during the four year period;
3. There shall be no interest payable on the Award;
4. The respondent shall, within 14 days of the distribution of the reasons, transfer one share in H Limited to the petitioner to be held by him until the Award has been paid in full, whereupon he shall immediately transfer the share back to the respondent;
5. Any dividend paid by H Limited whilst the husband holds the share shall be deducted from any amount of the Award outstanding by the wife;
6. The Petitioner shall, within 14 days of the date of distribution of the reasons, transfer his share in A Limited to the respondent;
7. The Petitioner shall within 14 days of the date of distribution of the reasons, provide to the respondent copies of all correspondence and to the Social Security Department pursuant to the order dated 23rd June 2015 with regard to any benefits to which the petitioner might be entitled;
8. The respondent shall pay outstanding maintenance to the respondent [sic] in the sum of £3000 less any sums paid to the petitioner by the Social Security Department within four years of the date of distribution of the reasons;
9. No further maintenance shall be paid by the respondent to the petitioner save as set out in paragraph 8;
....
12. There shall be no order as to costs."
6. In his notice of appeal dated 26th November, 2015, the Petitioner appeals to this Court against the Order on what are essentially the following grounds:-
(i) That the Registrar should not have determined that she could rely on and prefer the evidence given by the Respondent where it differed in material respect to the evidence of the Petitioner ("the Respondent's Credibility");
(ii) That the Registrar was wrong in taking the valuation of H Ltd in the sum of £124,500 in the light of the evidence ("the Value of H Ltd");
(iii) That the Registrar was wrong in rejecting relevant evidence, namely that of Mr B("the B Evidence");
(iv) That the Registrar was wrong in not determining that the Respondent had maintained her entire shareholding in H Ltd and, accordingly, finding that the Petitioner's interest in the Respondent's shareholding would be confined to £41,500 ("the H Ltd Shareholding");
(v) That the Registrar was wrong in finding that there was no value in A Ltd ("Value of A Ltd");
(vi) That the Registrar was wrong in finding that the value in Property 2 was £51,988.61 and not £53,407.22 ("Value of Property 2").
(vii) That the Registrar was wrong in the light of the evidence as a whole to "give the benefit of the doubt" to the Respondent in finding that there existed an agreement with the Petitioner's parents in relation to Property 1 ("The Property 1 Agreement");
(viii) That the Registrar was wrong in not awarding interest ("Interest");
(ix) In the premises of the preceding grounds the Registrar failed to exercise the discretions given to her in law appropriately ("the Exercise of Discretion").
7. We remind ourselves of the test that this Court applies on appeals from the Registrar. This is set out in the case of Downes v Marshall [2010] JLR 265 where Bailhache, Commissioner said at paragraph 12:-
8. Both the Petitioner and the Respondent gave evidence before the Registrar. As might be expected there was disagreement between them on certain matters. Accordingly the credibility of their evidence was a matter of importance in the Registrar's determination.
9. It is clear that in significant respects the Registrar preferred the evidence of the Respondent to that of the Petitioner. This, the Petitioner argues, the Registrar was not able to do because, in effect, the evidence of the Respondent was not reliable.
10. It is clear that there were difficulties with the evidence of the Respondent. Indeed, at paragraph 71 of her(unpublished) reasons the Registrar said:-
11. In the light of this finding, so the Petitioner argues, the Registrar could not properly have relied upon the veracity of the Respondent's evidence and should, instead, have preferred the evidence of the Petitioner in respect of whom she made no similar findings.
12. There is no doubt that the Respondent was less than frank about the person with who she was in a relationship. In her closing submissions she attributed that to fear of the consequences because, amongst other things, she had received threats in respect of that person.
13. In our view the fact that the Respondent lied about her relationship does not of itself undermine the rest of her evidence to such an extent that the Registrar could not have relied upon it in other respects. People tell lies for different reasons and it is important to consider what those reasons might be before taking that lie as an indication that a witness is incapable generally of belief (see for example The Lucas direction routinely given to juries in criminal cases). We can well understand that the Respondent may well have been sensitive about the identity of the person with whom she was in a relationship and indeed the fact of the relationship itself. Whilst this does not excuse a lie it was certainly open to the Registrar to take the circumstances into consideration in her assessment of the evidence.
14. The Registrar heard the witnesses at some length. Applying the principles of Downes v- Marshall we do not see a basis for rejecting the Registrar's findings of fact purely on the basis of the lie that she told about her new relationship and the other matters referred to in the Registrar's reasons. We dismiss that part of the appeal.
15. In her reasons the Registrar took the valuation of the shares in H Ltd at £124,500. To understand why that valuation is in dispute it is important to set out a little of the background:-
(i) The first valuation of H Ltd was produced by Alex Picot Limited and is dated 25th August, 2015, ("the original valuation"). It was produced for the purposes of the hearing before the Registrar. Under the heading "Equity Value Conclusions" the report states:-
"We have estimated the fair market value on 100% of the shares to be £375,000 as described within this report".
The original valuation was based on an adjusted balance sheet which excluded goodwill for the acquisition of G Ltd and the shareholder loan accounts. Furthermore, at page 3 of the original valuation there is the following:-
"There were no restrictions or limitations in the scope of our work or on the data available for analysis, other than the unavailability of the approved 2014 financial statements of the company."
(ii) A further report was produced by Alex Picot Limited ("the revised valuation") pursuant to an order of the Court on 22nd September, 2015. At page 2 of the revised valuation (which is only some five pages and comprises largely schedules of statements) the authors say this:-
"The Court ordered that the valuation report be updated to incorporate the results of the company reflected in the approved financial statements as at 31st December 2014 and the financial reports for the period 1st January to 6th September 2015.
Our conclusion of value following this revision is £124,500 for 100% of the shares."
(iii) The revised valuation was provided shortly before the date that was previously fixed for the final hearing before the Registrar. In the light of the difference between the original valuation and the revised valuation the Petitioner applied for an adjournment. The purposes of the adjournment, so it appears from the reasons of the Registrar who granted it, was to enable the Petitioner to consider and investigate the revised valuation in order to understand whether such a significant fall in value (which would inevitably result in less money for the Petitioner) was justified. The Court did not, however, grant leave to submit a further expert report nor at that stage was it asked to do so.
(iv) On 27th October, 2015, Mr B, on the instruction of the Petitioner's legal advisers, produced a further report into the valuation of H Ltd which valued that company at £300,000 ("the B report").
(v) The B report set out a number of factors that needed to be addressed to arrive at the valuation including clarification relating to expenditure, turnover as against market conditions, increase of the cost of sales, and valuation of stock and treatment of loan balances. The valuation is arrived at "making assumptions on the above and without detailed information to support the information detailed below". Mr B in preparing his valuation, did not meet with the Respondent who of course was running H Ltd nor, indeed with H Ltd's accountants or the author of the original and revised valuations.
16. Mr B gave evidence before the Registrar. He identified his report and the Petitioner asked that it be taken into evidence. The Registrar did not demure. Mr B was then examined at some small length both in chief and by way of cross-examination and the Registrar was invited to ask questions at the end of his examination but she had none. Consequently, the evidence of Mr B both in writing and orally was before the Registrar.
17. In the Registrar's reasons she dealt with the valuation of H Ltd at paragraphs 73 to 76 inclusive. She quotes from the case of K v K Ancillary Relief Management of Difficult Cases [2007] 2 FCR 94 which dealt with the instruction of joint valuer for matrimonial assets and which, at paragraph 39, said the following:-
18. The Registrar also quoted from Rayden & Jackson on Divorce and Family Matters in which the learned authors say:-
19. At paragraph 76 of the Registrar's unpublished reasons she said this:-
20. The Petitioner argues that the purpose of the adjournment was to obtain further valuation evidence and further the Registrar had admitted that evidence and had in effect given consent for the valuation to be used. We do not agree that the adjournment was for the purposes of obtaining further evidence. It was expressly for the purpose of evaluating the second report. That may have given rise to a further report but then it would have been necessary to apply to the Court for leave to admit the report and a decision as to its admissibility or appropriateness, and indeed whether a further report was needed or other witnesses should be called, would have been made.
21. We are troubled by the fact that the Registrar allowed the evidence to be deployed before her and then subsequently rejected it on the grounds that it could not be used. It seems to us that the correct stage for rejecting evidence on that basis should have been at the point where the Petitioner sought to introduce it (or indeed before then at a directions hearing for that purpose). In our view, however, it was open to the Registrar given that she was functioning as a single judge of both law and fact to hear the evidence but thereafter declare it to be inadmissible and for that reason to discount it. Indeed it appears to us that there may well have been other reasons available to the Registrar to prefer the revised valuation over the B report but those reasons were not advanced by her. Had the Respondent been legally represented then it may be that the issue relating to the admissibility or otherwise of the B report would have been taken at an earlier stage. Be that as it may, we think that it was open to the Registrar to discount the B report in the way that she did and for the reasons that she did.
22. It is the case that neither of the parties called nor sought to examine the author of the revised valuation. It also seems to us that if a challenge was to be made to that revised valuation, which was after all prepared by reason of an order of the Court for the use in the proceedings, then the author of the revised valuation would have needed to be called to give evidence and to be available for cross-examination and very possibly orders would also need to have been sought and obtained for the admission of further expert evidence.
23. However, in our view it was open to the Registrar to proceed on the basis of the revised valuation and we dismiss that ground of appeal.
24. The Petitioner disputes the way in which the Registrar dealt with in her decision of the Petitioner's interests in H Ltd.
25. As set out earlier, H Ltd was originally a family run business run by the Respondent's family having been established in 1994. When the Respondent took over H Ltd she became the owner of 100% (3 shares) of the company. Some years later in 2013, H Ltd acquired the Petitioner's business for which the Petitioner was to receive one share in H Ltd and a loan account of sum £58,000. The share was never transferred into the Petitioner's name.
26. There was dispute between the parties as to whether the Petitioner did, from the time of their separation, own and retain his share in H Ltd. There was some evidence relating to the Respondent's assertion that the Petitioner had requested that his share be transferred to his stepson, the Respondent's son C, who also worked at H Ltd.
27. There is no doubt that any discussions relating to a transfer of the Petitioner's share to C took place at a time when the Petitioner was in an unbalanced mental state. It took place over a period, so we are informed, during which, as a result of a Respondent wishing to leave, the Petitioner had sought to take his own life.
28. The Registrar dealt with that aspect of her unpublished judgment at paragraph 79 in which she said:-
29. This seems to us to be an entirely proper assessment that the Registrar was entitled to make on the evidence and accordingly, at the very least, the Petitioner was entitled to his share in H Ltd.
30. A share was transferred to C on 16th April, 2015, and accordingly, allowing for the fact that the Petitioner should have been issued a share in H Ltd, H Ltd is owned as to 33.33% by each of the Petitioner, the Respondent and C or, if the transfer of the share to C was ineffective, as to 33.33% by the Petitioner and 66.66% by the Respondent.
31. The Registrar's approach to the Petitioner's interest in H Ltd was a matter of dispute. The Petitioner asserted that the transfer to C was in effect a sham and should be discounted. In reality it is argued the entirety of H Ltd should be taken to be a matrimonial asset of which the Petitioner's entitlement, irrespective of his one third shareholding, should be 50%. The Respondent's position, however, was that the Petitioner was not entitled to a share in H Ltd but, in any event, she owned no more than 66.66% of it (on the basis, of course, that the Petitioner was not entitled to any of it) with the remaining 33.33% being owned by C.
32. The Registrar approached this issue, at paragraph 79 of her unpublished reasons in the following way:-
33. Although the Petitioner describes the Registrar's approach as confused it appears to us that she made a finding on the evidence that the Petitioner's contribution to H Ltd was not the equivalent of that of the Respondent and, accordingly, she did not wish to divide it on the basis of a 50/50 division. This was a decision that she was entitled on the evidence to take for the reasons that she stated. Secondly, she accepted that by agreement the Petitioner was entitled to the value of his one share and it is for that, in part, that her order provided. It seems to us that the Registrar did not accept the Respondent's evidence insofar as it related to the transfer of the share, either purportedly by the Petitioner, or when she transferred the share to C. What the Registrar was saying, however, was that the husband was not entitled to one half of H Ltd whether or not it was a matrimonial asset and his interest should be fixed at the value reflected by his one third shareholding.
34. We think that this was a finding that the Registrar was entitled to make and we dismiss that part of the appeal.
35. The Petitioner also disputes the Registrar's finding with regard to the value in the company A Limited. That company was formed in January 2015 to conduct the business of a gift shop and the shop opened in April 2015. During that period money was put in which was reflected in a director's loan account in the sum of £13,108.61. The business was not doing well, although open and running, and its future was under review.
36. The Registrar deals with this at paragraph 81 of the reasons in the following terms:-
37. Given the nature of the company as a start-up business and its financial position it is clear that there is no material value in it at the present time and the Registrar's decision is justified. Accordingly we dismiss that part of the appeal.
38. There was a relatively minor complaint raised by the Petitioner concerning the valuation of the Petitioner's share in the property Property 2.
39. In effect the Registrar proceeded on the basis that the total sum of money paid with regard to Property 2 was £53,407.22 but before dividing that figure by 50% to ascertain the correct share deducted from it one half of the rent and one half of the expenses paid by the wife alone since the date of separation.
40. The complaint is that the Registrar should have treated this sum as a matrimonial asset and therefore have worked on the basis of an equalled division of it unless there were good reasons for doing otherwise.
41. It is for the Registrar, of course, to exercise a judgment and discretion in the light of the figures as a whole and applying the principle set out in Downes v Marshall (above) in our view this determination fell within the discretion of the Registrar and is not a matter with which we should interfere. Accordingly we dismiss this aspect of the Petitioner's appeal.
42. The position with regard to Property 1 is of rather more significance, however. Evidence was given before the Registrar from the Respondent that a similar arrangement was in place for Property 1 as existed for Property 2. In other words it was alleged that the payments to the Petitioner's father by way of rental was in fact a contribution to the eventual acquisition by the Petitioner and the Respondent of Property 1.
43. The Petitioner disagreed with this. The Petitioner's parents were not called upon to give evidence by either party.
44. The Registrar dealt with the matter in her reasons as follows:-
45. A difficulty in using the agreement over Property 2, about which there was no dispute, to infer that a similar agreement must have existed over Property 1 is, of course, that there is no independent evidence that a similar arrangement existed. In fact other documentary evidence might suggest that the arrangement was a straightforward lease and not an arrangement that was the equivalent of that which applied for Property 1.
46. In her reasons the Registrar, at paragraph 41, in characterising the evidence of the Petitioner, said:-
47. There was nothing in writing to reflect the supposed agreement for the purchase of Property 1.
48. The Petitioner in his evidence had made reference to the fact that he had a number of siblings and he doubted very much whether his parents would have made the arrangements suggested by the Respondent as this would have prejudiced the position of the other children.
49. There were other allegations within the evidence of threats made by the Petitioner's brother when he allegedly heard about the arrangement but the Petitioner himself indicated that he had no memory of such events taking place.
50. The Registrar, as we have already noted, at paragraph 83 of her judgment indicated that she had "given the benefit of the doubt to the agreement in respect of Property 1 as it does mirror the agreement in respect of Property 2". This does not seem to us to be a clear preferring of the evidence of the Respondent over that of the Petitioner nor does it sit easily with the existence of a lease.
51. We were referred to a letter of 20th May, 2015, after the separation, from the Petitioner's father concerning arrears of rent and that also appears to be consistent with a lease.
52. For these reasons we readily accept that the question for the Registrar to resolve was a difficult one. It is indeed a pity that evidence was not adduced by either of the parties to bring some measure of clarity.
53. We remind ourselves, however, that the Registrar had heard the evidence and in setting out the evidence available to her in the way that she did could not be said that she had ignored relevant matters or necessarily reached a conclusion that the Court is satisfied is a wrong one. In our view there was evidence on which the Registrar could find that an agreement existed with regard to Property 1 to mirror that of Property 2 and accordingly we do not feel able to overturn that element of the Registrar's finding in any event.
54. In paragraph 87 of her reasons the Registrar declined to order interest on the sum that she found to be due by the Respondent to the Petitioner. However she allowed a significant period within which the Respondent can make payment to the Petitioner, specifically four years from the date of the reasons.
55. In our view, on first principles, the Petitioner is entitled to his money as of the date at which that amount is determined and ordered and whereas the Registrar has every right to defer payment to a time when it becomes affordable it seems to us that the Petitioner should be entitled to interest on the payment in compensation for his inability to use the monies until they are repaid. Indeed an interest element would be a valuable discipline to secure early payment of the sum involved and in our view interest should have been ordered.
56. Accordingly we order that interest shall accrue on the outstanding balance at the court rate.
57. The final ground of appeal is really an omnibus ground argued on the basis that because of the other matters raised in the appeal and the failure by the Registrar to divide the assets equally or, if not, then to provide good reasons for departing from equality that there was an improper exercise of a discretion.
58. In our view there is no basis for saying that the Registrar did not exercise her discretion appropriately (save where we have allowed elements of the Petitioner's appeal). There is no doubt that the Registrar, who is very experienced in these matters, was fully aware of the principle of equality and explained the evidentiary underpinning of the decisions that she made.
59. In our view there is nothing in this ground of appeal that adds to the other grounds dealt with above.
60. In conclusion we dismiss the Petitioner's appeal against the decision of the Registrar save that we order that the sum of £29,102.11 shall bear interest on any outstanding balance of the said sum at the court rate until repayment.
