SHERIFFDOM OF GLASGOW AND STRATHKELVIN AT GLASGOW

 

F993/09

JUDGMENT

OF

WENDY SHEEHAN, Sheriff of Glasgow and Strathkelvin

In the cause

JOHN MARTIN HALES, residing at Flat 1/3, 437 Duke Street, Glasgow G31 1RY

PURSUER

Against

JEAN GRAY TEIRNEY or HALES, residing at 67 Carntyne Place, Glasgow G32 6JW

DEFENDER

                                                                        

 

Act: Anderson

Alt: Herron

 

 

GLASGOW 16 May 2012. The Sheriff having resumed consideration of the cause finds the following facts admitted or proved:

(1) The parties were married at Glasgow on 15 September 2000.

(2) There are no children of the marriage.

(3) Both parties were previously married and divorced and have adult children from their first marriages.

(4) The parties are habitually resident in Scotland and have been so resident for more than 12 months prior to the raising of this action. The pursuer has been resident within the Sheriffdom of Glasgow and Strathkelvin for a period of exceeding 40 days immediately proceeding the raising of this action. The pursuer knows of no proceedings continuing or concluded in Scotland or elsewhere which relate to the marriage or are capable of affecting its validity of subsistence. This court accordingly has jurisdiction.

 

(5) The parties have not lived together nor had martial relations since 3 May 2004. Their marriage has broken irretrievably. There is no prospect of reconciliation between the parties.

 

(6) The parties separated on 3 May 2004 which is the "the relevant date" for the purposes of section 10(3) of the Family Law (Scotland) Act 1985 (as amended) (hereinafter referred to as "the 1985 Act").

 

(7) The total net matrimonial property at the relevant date was as follows:

 

(a) 67 Carntyne Place, Glasgow G32 6JW: a heritable property the title to which is held in the sole name of the defender (hereinafter referred to as "the said property"). The said property had an agreed value of £76,000 at the relevant date and was subject to a mortgage a balance outstanding at the relevant date of £40,000. The net value of the said property at the relevant date was accordingly £36,000.

 

(b) The defender's pensions:

(i) Scottish Widows Annuity Policy No. 14600801 which reduced in value by the sum of £733.48 during the period of the marriage.

(ii) The defender's SERPS Pension which accrued a value of £4,406.57 during the period of the marriage.

 

(c) The pursuer's pensions:

(i) Phoenix Life Policy No. P600113G which accrued a cash equivalent transfer value attributable to the period of the marriage of £11,980.01.

(ii) The pursuer's SERPS Pension which accrued a value of £4,068.15 during the period of the marriage.

The total net matrimonial property at the relevant date was £55,721.24 of which £16,048.15 was held by the pursuer and £39,673.09 was held by the defender.

 

(8) In order to effect an equal sharing of the net matrimonial property at the relevant date, the defender would require to pay the pursuer a capital sum of £11,812.47. The pursuer seeks an order for payment of a capital sum of this amount.

 

(9) The pursuer is employed by Luddon Construction. He commenced that employment in 2004. He earns £1,913.00 net of tax and national insurance per month. This is his only source of income. He has the benefit of a company car. He has resided in rented accommodation since 2004. He has no savings or other assets. He is aged 60 years. The earliest date he could retire is aged 65 years. He is unable to secure borrowing with which to purchase a heritable property. He has no outstanding debts or liabilities.

 

(10) The defender is aged 56 years. She is not in employment. She resides with her partner Mr Peter Paton for whom she is a full-time carer. She has cohabited with Mr Paton for a period in excess of three years. They share all household outgoings. The defender's income is in the form of Carer's Allowance of £55.55 per week. She also has an Annuity from Scottish Widows of £93.26 per annum. Mr Paton receives income of Disability Living Allowance of £125 per week, State Pension of £116.15 per week and Pension Credit of £72.58 per week viz. a total of £313.73 per week. The defender continues to reside in the property at 67 Carntyne Place, Glasgow which is held in her sole name. The said property has significantly increased in value since the relevant date. The outstanding mortgage over the said property at the date of proof was in the sum of £35,533.43. The defender is unable to increase the secured borrowing over the said property in order to finance the payment of a capital sum to the pursuer. She has no savings or other assets. She took out a secured loan of £5,000 in November 2008 which had an outstanding balance at the date of proof of approximately £2,430. She owns a motor vehicle which is subject to a finance agreement and has no net value. The only resource available to the defender from which to meet the pursuer's claim for financial provision on divorce is the equity in the property at 67 Carntyne Place, Glasgow. She is able to access the equity in the said property only by selling the said property. She is unwilling to sell the said property voluntarily.

 

(11) The defender suffers from type 1 chronic hepatitis C. She has established liver disease possibly to the extent of cirrhosis. She has been assessed as suitable for anti-viral drug therapy. The said therapy may last as long as 48 weeks and involves both weekly injections administered at a clinic at Glasgow Royal Infirmary and medication in the form of tablets. The said treatment can be associated with significant side effects including fatigue, depression, anaemia, bone marrow disorders, vomiting, loss of appetite and weight loss. The defender will be carefully monitored and assessed by a consultant physician and hepatologist at Glasgow Royal Infirmary and will attend regular clinic appointments while receiving anti-viral drug therapy. She is due to commence the said drug therapy imminently. The said drug therapy has an 70- 80% prospect curing the defender's hepatitis C. If the defender does not receive the said therapy her condition will worsen. The defender cannot reasonably be expected to sell her home and move house while undergoing the said drug therapy.

 

FINDS IN FACT AND LAW:

 

(1) The marriage of the parties has broken down irretrievably by reason of the parties' non-cohabitation for a continuous period in excess of two years.

 

(2) The parties separated on 3 May 2004 which is the "the relevant date" in terms of the Family Law (Scotland) Act 1985.

 

(3) The parties' total net matrimonial property at the relevant date was £55,721.24 of which £16,048.15 was held by the pursuer and £39,673.09 was held by the defender at the relevant date. In order to achieve an equal division of the net matrimonial property the defender requires to pay the pursuer a capital sum of £11,812.47.

 

(4) There are no principles or special circumstances to be applied which would justify a departure from the equal sharing of the net matrimonial property between the parties.

 

(5) An order for payment of a capital sum by the defender to the pursuer of £11,812.47 is reasonable with regard to the resources of the parties.

 

(6) The only resource which the defender has available to her to make payment of the said capital sum to the pursuer is the equity in the property at 67 Carntyne Place, Glasgow. She is unwilling to sell the said property voluntarily. An order for the sale of the said property together with an order for payment of a capital sum of £11,812.47 are accordingly justified by the principle set out in section 9(1)(a) of the Family Law (Scotland) Act 1985 as amended. It is not reasonable to expect the defender to sell the said property immediately upon the granting of decree of divorce given her state of health and medical treatment regime over the next year. Said orders should accordingly require the sale of the said property and payment of the said capital sum within 18 months of the date of decree of divorce to follow hereon.

 

THEREFORE, sustains the second, third and fourth pleas-in-law for the pursuer, repels the first, second and third pleas in law for the defender; grants decree of divorce, divorcing the defender from the pursuer, grants an order for payment by the defender to the pursuer of a capital sum of £11,812.47 with interest thereon at the rate of 8% per annum from the date of decree of divorce to follow hereon until payment; grants an Order for the sale of the former matrimonial home at 67 Carntyne Place, Glasgow G32 6JW, said order to be superceded for a period of 12 months following the date decree of divorce to follow hereon, sets the cause down to call on 25 June 2012 at 12.30pm in order for parties to address the court in relation to the specific terms of the order for sale of the said property and as regards all questions of expenses arising..

 

 

 

 

NOTE:

 

[1] In this action the pursuer seeks divorce from the defender on the grounds that the marriage has broken down irretrievably by reason of the parties' non-cohabitation for a continuous period in excess of two years. On considering the terms of affidavit of the pursuer no. 22 of process and the supporting affidavit of Ms Kimberley Neil, no. 23 of process, together with the evidence of the defender, I am satisfied that there is sufficient evidence to justify the granting of decree of divorce.

 

[2] There are no children of the marriage. Both parties were previously married and divorced and have adult children from their first marriages. The period between the date of the parties' marriage and their separation was three years and eight months.

 

[3] The parties separated on 3 May 2004 which is the relevant date for the purposes of section 10(3) of the Family Law (Scotland) Act 1985 as amended.

 

[4] The parties entered into a Joint Minute of Admissions, no. 21 of process which sets out the extent of the net matrimonial property at the relevant date, the valuations thereof and the division of the said property that had taken place by agreement between the parties at the date of the proof. The total net matrimonial property at the relevant date was £55,721.24. The pursuer held £16,048.15 of the net matrimonial property in form of his Phoenix Life Limited Pension Policy and SERPS Pension. The defender held £39,673.09 of the net matrimonial property which was comprised of her Scottish Widows Annuity and SERPS Pension together with the equity in the former matrimonial home at the relevant date

.

[5] The former matrimonial home at 67 Carntyne Place, Glasgow G32 6JW was purchased by the parties shortly before their separation. The property is held in the sole name of the defender. The agreed valuation of the said property at the relevant date reflects the purchase price paid by the parties for the property of £76,000. The outstanding mortgage at the relevant date was £40,000 leaving equity of £36,000. The parties were in agreement at the date of proof the said property had substantially increased in value. No evidence was led as to the current value of the property. The pursuer is not entitled to share in any increase in value of the said property which has accrued following the parties' separation as the property is held in the defender's sole name. This is her sole resource. The mortgage over the said property at the date of proof was outstanding in the sum of £35,533.43. The defender has made sole payment of the mortgage since the date of separation. A portion of the mortgage interest payments have been funded by state benefits. The defender has resided in the said property since the parties' separation. The pursuer has resided in private rented accommodation.

 

[6] The pursuer seeks a capital sum representing an equal sharing of the parties' net matrimonial property at the relevant date. An equal sharing of the parties' net matrimonial property would require payment of a capital sum by the defender to the pursuer of £11,812.47. The parties agree that on an equal sharing of their net matrimonial property a capital sum of this amount is due by the defender to the pursuer.

 

[7] I was directed by both parties to the following provisions of the Family Law (Scotland) Act 1985 ( as amended) (hereinafter referred to as "the 1985 Act"):

 

"8 Orders for financial provision

(1) In an action for divorce, either party to the marriage may apply to the court for one or more of the following orders -

(a) an order for the payment of a capital sum to him by the other party to the marriage;

(aa) an order for the transfer of property to him by the other party to the marriage

(b) an order for the making of a periodical allow to him by the other party to the marriage;

(baa) a pension sharing order;

(ba) an order under section 12A(2) or (3) of this Act;

(c) an incidental order within the meaning of section 14(2) of this Act;

(2) Subject to sections 12 to 15 of this Act, where an application has been made under subsection (1) above, the court shall make such order, if any, as is -

(a) justified by the principles set out in section 9 of this Act; and

(b) reasonable having regard to the resources of the parties.

 

9 Principles to be applied

(1) The principles which the court shall apply in deciding what order for financial provision, if any, to make are that -

(a) the net value of the matrimonial property should be shared fairly between the parties to the marriage;

 

10 Sharing of value of matrimonial property

(1) In applying the principle set out in section 9(1)(a) of this Act, the net value of the 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.

 

12 Orders for payment of capital sum or transfer of property

(1) An order under section 8(2) of this Act for payment of a capital sum or transfer of property may be made -

(a) on granting decree of divorce....; or

(b) within such period as the court on granting decree of divorce may specify."

 

(2) The court, on making an order referred to in subsection (1) above, may stipulate that is shall come into effect at a specified future date

 

 

14 Incidental Orders

(1) Subject to subsection (3) below, an incidental order may be made under Section 8 (2) of this Act before, on or after the granting or refusal of decree of divorce...

(2) In this Act, an 'incidental order' means one of the following orders-

(a) an order for the sale of a property "

 

 

[8] The position adopted by the pursuer in this case is an entirely straightforward one, viz. that he asks the court to apply the principle set out in section 9(1)(a) of the 1985 Act that the net value of the matrimonial property should be shared equally between the parties to the marriage and consequently he seeks an order for payment of a capital sum under section 8(1)(a) of the said Act. He maintains that this order is both justified by the principle set out in section 9(1)(a) of the Act and reasonable having regard to the respective resources of the parties in terms of section 8(2) of the Act. The only resource from which the defender is able to make a capital payment to the pursuer is the equity in the former matrimonial home and she is unwilling to sell the property voluntarily. Consequently he also seeks an incidental order for the sale of the said property under section 14(2)(a) of the 1985 Act.

 

[9] This case proceeds to proof in respect of the defender's opposition to the pursuer's crave for a capital sum. Her primary submission is that it is not reasonable with regard to the parties' respective resources in terms of section 8(2) of the 1985 Act that any order for capital payment payable by her to the pursuer should be made. Esto the court considers that she should be required to make payment of a capital sum to the pursuer, the said sum should be discounted to take account of her meagre resources and further, that the period of payment of a capital sum by her to the pursuer should be delayed for a period of 18 months from the date of decree of divorce.

 

[10] The defender is aged 56 years. She is not in employment. She ceased her employment in order to care for her partner, Peter Paton. They have cohabited for a period in excess of three years. Their relationship is of a permanent and lasting nature. They share all household outgoings. Mr Paton's income is in the form of Disability Living Allowance, State Pension and Pension Credit which give him a combined income of £313.73 per week. The defender not yet eligible for her State Pension. She has a very small annuity from Scottish Widows and her income is in the form of a Carer's Allowance of £55.55 per week. The total net monthly income which she and her partner receive jointly is the sum of £1,607.99. The title to the property at 67 Carntyne Place is held in her sole name. The bulk of the joint income received by herself and her partner is paid to Mr Paton. She is not in a position to increase the mortgage borrowing over the property in order to realise resources with which to make payment of a capital sum to the pursuer. It was a matter of agreement between the parties that the defender is unable to obtain further secured borrowing. She has an outstanding personal loan at the date of proof of £2,430 and also makes a finance payment in respect of her car which has no net value. She has very restricted means and no other resource either capital or income for which she is able to fund payment of a capital sum.

 

[11] The defender has recently been diagnosed with type 1 hepatitis C. The parties entered into a second Joint Minute of Admissions, no. 24 of process. The said Joint Minute inter alia agrees the terms of the letter from Mr Ewan Forrest, Consultant physician and hepatologist dated 21 March 2012 which confirms that in late 2011 the defender was diagnosed with type 1 chronic hepatitis C. The said Joint Minute confirms that the defender is currently being assessed for anti-viral treatment and is likely to be assessed as suitable. The treatment recommended is anti-viral drug therapy which is administered by a combination of injections (which the defender would receive when attending the clinic at Glasgow Royal Infirmary) and tablets taken regularly by her. It is hoped that this treatment regime will start imminently. The treatment may last as long as 48 weeks and has somewhere between a 70% to 80% chance of curing the virus. The defender will have to be closely monitored and assessed during the drug therapy as this can be associated with significant side effects ranging from depression, fatigue, skin rashes, anaemia, bone marrow disorders, vomiting, loss of appetite and weight loss. If the defender does not receive the anti-viral drug therapy her condition will worsen. She cannot reasonably be expected to delay commencement of the drug therapy for what may be some months until the sale of the said property and further her state of health is likely to be such that she will be unable to cope with moving house while undergoing the said drug therapy.

 

Pursuer's submissions

 

[12] The pursuer's agent Ms Anderson referred me to the terms of section 8(1) and 8(2) of the 1985 Act together with section 9(1)(a) and section 10(1). The position adopted by the pursuer is an entirely straightforward one, namely, that he seeks an equal sharing of the net matrimonial property at the relevant date and having waited almost eight years since the parties' separation now wishes access to his share of the net matrimonial property. The pursuer lives alone in rented accommodation. His net income is £1,913 per calendar month from which he makes payment of rent. He has the benefit of a company car. He has no savings or other assets and is unable to secure borrowing with which to purchase a heritable property. The delay in payment to him of his share of the matrimonial property has prejudiced him given the passage of time and as he has no other realisable resources he now wishes immediate payment of this sum. I was not referred to any authorities beyond the above sections of the 1985 Act by the pursuer's agent.

 

Defender's submissions

[13] The defender's agent Ms Herron invited me to consider carefully the terms of section 8(2) of the 1985 Act, namely, that any order for financial provision made by the court should be reasonable having regard to the resources of the parties. No submission was made that I should consider the defender's health condition as a "special circumstance" but instead it was submitted that that her personal circumstances and her own very limited income should be taken into account in assessing the reasonableness of any order made with regard to her resources. It was submitted that I should have in mind the grave impact that any order for sale of her property would have on her given her fragile health and that the consequences for her requiring to sell her home and relocate in circumstances where she is most unlikely to be able obtain a further mortgage funding to purchase an alternative property. The impact on her resources of the sale of her home and payment of a capital sum was severe and should be contrasted with the relatively stable financial position of the pursuer who has a greater level of income, is healthy and will continue in employment for another five years. Taking into account the parties' respective circumstances and resources it was submitted that I should exercise my discretion to refuse the pursuer's crave for an order for payment of a capital sum. If I was not minded to accept that submission the defender's esto position was that I should discount the level of any capital sum payable in view of the disparity in the parties' resources and further, should delay payment of any order for an appropriate period of at least 12 months to allow the defender to complete the anti-viral drug therapy required to treat her Chronic Hepatitis C. Ms Herron referred me to the opinion of Lord Jauncey of Tullichettle in the case of Wallis v Wallis (HL) reported at 1993 SLT 1352 in which he states:

"In terms of section 8(2) on an application for an order under section 8(1) the court 'shall make such order, if any, as is (a) justified by the principles set out in section 9 of this Act; and (b) reasonable having regard to the resources of the parties. These requirements are cumulative with the result that unless both are satisfied the court has no power to make the order. Where an application relates to the sharing of the matrimonial property section 9(1)(a) requires that its net value is shared fairly and section 10(1) provides that the net value should be taken to be shared fairly when it is shared equally or in such other proportions as are justified by special circumstances. Assume a situation in which neither party has any personal capital and they only matrimonial property consists of a house and contents. Assume further that between the relevant date and the date of the hearing the value of the house has diminished by more than one half, for example, as a result of unforeseen subsistence or incompatible adjacent development. In that situation the court could make no order under section 8 because it would be unreasonable having regard to the resources of the spouse in possession of him or her to pay to the other a sum in excess of any available capital".

 

Ms Herron therefore submitted that the requirements of section 8 are cumulative and that applying the second part of the test requires the court only to make an order where it is reasonable with regard to the parties' resources. The circumstances of this case are particularly stark given the defender's meagre resources and the significant impact not only her health but her future circumstances as if she is forced to sell her home she would be unlikely to be in a position to purchase equivalent alternative accommodation as she will no longer be in a position to obtain mortgage borrowing. She submitted that in taking those facts and circumstances into account I should refuse the pursuer's crave for a capital sum. Alternatively, if I did not accept that submission I should reduce the sum paid by the defender to the pursuer so as to maximise the sums available to her to fund alternative accommodation and should allow an appropriate deferral of the period for payment of the capital sum so as to allow her to complete the course of medical treatment currently prescribed while marketing the property within a reasonable period thereafter.

 

Decision

 

[14] The underlying principle of the Family Law (Scotland) Act 1985 is that property acquired by the spouses' income or efforts during the marriage should be shared fairly between them and 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. By the date of proof, no arguments were before the court in relation to special circumstances. Further, neither party founded upon the principles set out in section 9(1)(b), (c), (d) or (e) of the 1985 Act.

 

[15] The issue before me is a very narrow one. The parties have agreed by way of Joint Minute that total net matrimonial property at the relevant date was £55,721.24 of which £16,048.15 was held by the pursuer and £39,673.09 was held by the defender. The parties further agree that in the event of the court effecting an equal sharing of the net matrimonial property between the parties the defender would require to pay the pursuer a capital sum of £11,812.47. It is the defender's submission that having regard to the terms of section 8(2) of the said Act that I should refuse the pursuer's crave for a capital sum of £11,812.47 on the basis that it would not be reasonable with regard to the resources of the parties.

 

[16] It is a matter of agreement that the order sought by the pursuer is justified by the principles set out in section 9 of the Act. I accept the submission that the requirements of Section 8(2) are cumulative with the result that unless both are satisfied the court has no power to make an order.

 

[17] Turning to the resources of the parties; no evidence was led in relation to the current value of the property at 67 Carntyne Place, Glasgow. The parties have agreed in terms of the Joint Minute of Admission no. 21 of process simply that "the value of the matrimonial home will have increased significantly since the date of separation". An eight year period has elapsed since the date of separation. I am unable to reach any conclusion regarding the defender's capital resources without having information regarding the current value of the property. There was no evidence before the court regarding the defender's plans for acquisition of alternative accommodation in the event that the property at 67 Carntyne Place is sold. I am therefore unable to reach a concluded view that an order which would require the defender to sell the property and move to alternative accommodation would be unreasonable with regard to her resources. Further, while I accept that the defender has very little limited income of her own, she and her partner are entitled to various state benefits which include the payment of mortgage interest. I heard no evidence regarding the extent of any housing benefit which the defender would be entitled to in the event she required to move home. Therefore, on neither an income nor capital basis am I in a position to conclude that an order for sale of the heritable at 67 Carntyne Place, Glasgow would be unreasonable with regard to the defender's resources. Consequently, I do not accept the submission that I should refuse the pursuer's crave for an order for payment of the capital sum sought by the pursuer or indeed should discount the sum payable to him on the basis of the evidence before me at proof.

 

[18] Section 12 of the 1985 Act provides that;

"(1) an order under section 8(2) of this Act for payment of a capital sum or transfer of property may be made (a) on granting decree of divorce or (b) within such period as the court on granting decree of divorce may specify

(2) the court, making an order referred to in subsection (1) above, may stipulate that it shall come into effect at a specified future date".

 

Section 12 does not provide any test to be applied by the court in order to determine whether an order for payment of a capital sum should come into effect on a specified future date. The only logical basis can be a consideration of the defender's resources.It seems to me that the facts and circumstances of this case do lend themselves to a proper application of that section. While the pursuer has no realisable capital resources and has waited for a period of eight years to achieve a fair sharing of the matrimonial property, there is no real identifiable prejudice to him in a further delay of up to 18 months in payment of the capital sum to him. In contrast, the defender has a serious and debilitating illness which will worsen if not treated. The treatment regime prescribed by her specialist involves treatment over a period of 48 weeks, a fairly intensive level of attendance at medical appointments and monitoring and potentially very serious side effects. I am sympathetic to the defender's submission that it is not reasonable to expect her to sell her home and move while undergoing this treatment. Consequently, I accept the submission that the order for payment of a capital sum made under section 8 of the 1985 Act should be payable within a specified period 18 months. I considered this period to be reasonable as the capital sum payment will be paid from the proceeds of sale of the said property and a reasonable period for the marketing and sale of property on completion of the defender's treatment must be factored into the equation. As the defender is unwilling to voluntarily sell the property I consider it appropriate that an incidental order for sale of the subjects under section 14(2) is granted and that order should come into effect within a period of 12 months of the granting of decree of divorce or such other period as the parties may agree. I have insufficient information before me in order for me to set out in detail the terms of the order for sale of the property and therefore have set this case down to call on 25 June at 12.30pm to enable parties to address me in relation to the specific terms of the final interlocutor in this action. I have applied interest to the capital sum at judicial rate from the date of decree of divorce to follow hereon in recognition of the prejudice to the defender occasioned by the deferral of the payment of the capital sum.

 

[19] Both parties asked me to reserve all questions of expenses and may address me in relation to expenses when the case calls on 25 June 2012 at 12.30pm