Husband fails in financial appeal to Privy Council

finances and divorce

Time to escape briefly from the dull grey of an English December and spend a little time in the beautiful British Virgin Islands (weather today 29 degrees, sunny to partly cloudy).

On Monday we were treated to a rarity: a family law decision made by the Judicial Committee of the Privy Council. For those unfamiliar with this somewhat anachronistic body, I have previously explained here exactly what the Privy Council is – think: Supreme Court (i.e. final court of appeal) for many current and former Commonwealth countries. Indeed, the Justices sitting on the Judicial Committee are usually our Supreme Court Justices.

The decision was in the case Scatliffe v Scatliffe, an appeal by a husband against an order of the Court of Appeal of the Eastern Caribbean Supreme Court (British Virgin Islands). That order essentially dismissed an appeal by the husband against an order for ancillary relief (i.e. financial remedies following divorce) made in favour of the wife. The case does not break any new ground, but it does certainly say a couple of interesting things.

First a little background. The parties were married in 1971 and have two adult children. They lived in Road Town, the capital of the British Virgin Islands, on the island of Tortola. The marriage broke down and in 2009 the wife obtained a decree of divorce. The husband is now aged 70 and is disabled, having had his left leg amputated. The wife is aged 63.

The wife applied to the court for a financial settlement and, following a small adjustment by the appeal court, the assets were divided as follows. The wife was awarded the matrimonial home, worth $600,000, a lump sum of $50,000 and shares and cash to the value of $7,000. Her total award was therefore worth some $657,000. The husband was awarded a life interest in another property (where he was living) not actually valued but ascribed a value of $350,000, with the property passing to the children upon his death, a third property worth $425,000 and capital of $169,000. His total award (subject to what follows below) was therefore worth some $944,000.

Dissatisfied with this settlement, the husband appealed to the Privy Council. The appeal was heard by Lady Hale, Lord Wilson and Lord Carnwath. The judgment of the Privy Council was drafted by Lord Wilson.

The first point in the judgment to which I want to refer comes in the second paragraph. It is a warning of the hazards of a layperson representing him- or herself, particularly timely in these days of so many litigants in person since legal aid was abolished for most private law family matters:

“Unfortunately the husband chose to represent himself both before the trial judge and before the Court of Appeal. As a layman, he inevitably betrayed limited understanding of what was relevant and, on appeal, of his inability to give his evidence again.”

Thankfully, the husband was represented before the Privy Council.

Moving on, the judgment sets out the differences between the law on ancillary relief as applicable in the Virgin Islands, and the law as it is in England and Wales. As Lord Wilson says, the two systems are very similar, with the wording of the relevant statutes being almost identical. There is, however, one interesting difference. The law applicable in the British Virgin Islands includes a provision that the court should endeavour to place the parties in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other. We had such a provision in our law, but it was removed in 1984. Whilst I don’t think that much turned upon it in this case, it is interesting that the provision still exists beyond England and Wales.

The next point I want to mention is a short reminder by Lord Wilson of a point that was made by Lord Nicholls in the famous case Miller v McFarlane. The husband tried to argue that because he had bought the matrimonial home prior to the marriage it could not be transferred to the wife. Lord Wilson pointed out what Lord Nicholls had said: a matrimonial home should normally be treated as matrimonial property, even if one of the parties had brought it into the marriage at the outset.

Lord Wilson sets out the conclusion of the Privy Council upon the fairness of the settlement at paragraph 21 of the judgment. Unsurprisingly, he found that with the husband receiving $944,000 and the wife receiving $657,000 then, even if the husband’s life interest in the second property was not worth as much as $350,000:

“…it is easy to conclude that the judge’s order, as varied, was an entirely reasonable sharing of the matrimonial property. It gave to each of the parties a home in which to live for the rest of their lives and a rental income on which, even without other income, they could subsist. It appears moreover to represent an outcome (of which the basis is presumably a clean break) which was fair to both parties”

And that could have been the end of it, but Lord Wilson points out two further problems with the husband’s appeal.

Firstly, the husband had been found by the judge to have failed to disclose assets. This, of course, may have been because he had been unrepresented, but obviously an appeal court is not going to look favourably upon an appeal by a party who has failed to disclose assets.

The other problem is that the courts below had not even taken account of all of the assets that the husband did disclose. This appears to have been due to a misunderstanding about the treatment of “non-matrimonial property”. The husband’s list of assets included a guest house in Road Town that he had inherited from his parents. As the wife did not make a claim against the guest house the court had not sought a valuation of it, and had left it out of account, apparently considering it to be “non-matrimonial property”. However, as Lord Wilson pointed out, this is not correct: non-matrimonial property is not the same as property in which neither party has any interest, which should not be taken into account. Non-matrimonial property is property in which one party has an interest, but which because of its nature may not fall to be divided between the parties, for example assets owned prior to the marriage, or inherited property. Non-matrimonial should however be taken into account as it does belong to one of the parties and, for example, it can be used to meet the needs of the party that does not own it. Thus if the value of the guest house were taken into account then the settlement would obviously be seen to be even more favourable to the husband.

In the circumstances the husband’s appeal was dismissed.

The full report of Scatliffe v Scatliffe can be found here.

Photo of Road Town by Roger Wollstadt via Wikipedia under a Creative Commons licence

John Bolch

John Bolch often wonders how he ever became a family lawyer. He no longer practises, but has instead earned a reputation as one of the UK's best-known family law bloggers.

View more from this author

2 comments

Andrew - December 14, 2016 at 6:53pm

“the court should endeavour to place the parties in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other”

Dropped from our law, I believe, because in most cases it was pie in the sky. There is rarely enough to go round for that.

My view is that the law should be amended to provide that (in the absence of a prenup which should be conclusive) the court should seek to place the parites in a broadly simiular financial position after divorce to each other. Equal sacrifice.

Stitchedup - December 14, 2016 at 8:09pm

With some exceptions. E.g.there should be protection against opportunist separations/divorce. If, for example, a man has had a substantial redundancy payout and the woman still had her career intact, i believe the man’s redundancy payout should be protected. I also believe that if a woman divorces/separates from a man shortly after he has found himself redundant there should be due consideration given to his age, his contributions to the family assets and also due consideration given to whether the woman had decided to drop the baton, rather than taking it on, and simply cashed the man in.

Leave a comment