A husband has won his appeal against a divorce settlement that would have not have been possible to put into practice.
The case involved a couple who were both 58 and were divorcing after 13 years of marriage. The wife worked in a primary school and the husband owned a small company.
At the hearing before the district judge, it was agreed that the matrimonial home would be transferred to the wife and that she would sell her shares in the company to the husband. He would also pay her a separate lump sum of £60,550.
The judge then sought to equalise the couple’s capital assets. When calculating the husband’s capital, he included the company’s value of £206,000.
After calculating the wife’s capital, he concluded that the husband would need to pay a further lump sum of £40,550 to keep things equal. He considered that the husband could raise the total sum of £101,000 from the company if necessary.
He also calculated the maintenance that the husband should pay to the wife. He based the husband’s monthly income on levels he had achieved with the company before the divorce proceedings began, predicting that he would be revitalised once the divorce was resolved.
The husband appealed on the basis that the judge had not recognised that selling the company to raise the lump sum was not practicable. The judge had also failed to account for tax or the debt that the husband owed to the company, and ignored evidence showing that the husband had liabilities totalling £61,101.
The Court of Appeal ruled in favour of the husband. It said the district judge had not applied the correct principles in some of his calculations and had been wrong to ignore the issue of tax. He had also failed to analyse the schedule of indebtedness provided by the husband, which showed total liabilities of £61,101.
The court ordered that there should be a rehearing to calculate a new settlement.
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JM v MM (2015)
Fam Ct (Judge Wildblood QC) 19/06/2015