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Stop Press :John Franklin reported in VT v LT [2023] EWFC 256 (B) – Creating Two Households from Limited Assets

No.18 Chambers’ John Franklin represented the Applicant Wife (‘W’) in this reported case before District Judge Hatvany.

Factual Summary

The parties had an 18-year marriage producing three children, one now living independently.

The Respondent Husband (‘H’) resided in and discharged the mortgage on the former matrimonial home (‘FMH’). The H ran his business from the FMH, employing 5 people and earning around £44,500pa.

Conversely, the W rented accommodation at £826pm. The court considered this sum reducible through a shared ownership arrangement if the W could afford a deposit. The W was a McDonalds shift manager earning of £29,000pa, inclusive of £16,000 UC.

Assets

The sole asset was the FMH with an agreed valuation of £245,000 and outstanding mortgage balance of £123,215. The H’s matrimonial debts, serviced at £1,000pm, totalled £33,777 whilst the W’s totalled £3,922. Equal division of the net equity would leave each party with £40,543.

The Parties Positions

DJ Hatvany noted that, prima facie, both parties’ offers were unfair. The W sought sale of the FMH and £80,000 to facilitate renting a 3-bed property for her and the children. The H proposed he keep the FMH and pay the W £45,000 (£20,000 forthwith and £25,000 in 18 months).

One option left the H with the matrimonial debt and the W with nearly 100% of the net equity, the other kept the H in the FMH and the W with no security of tenure.

The Judge’s Decision

The Judge was alive to the parties’ mirrored housing needs for 3-bed properties and the task of “creating two households from limited assets”.

On consideration of the s25 MCA 1973 factors and the starting point of equality in a long 19-year marriage, District Judge Hatvany considered fairness necessitated a “modest departure from equality” in the W’s favour, awarding her 68% of the FMH’s net equity after settlement of the matrimonial debts.

The court ordered:

  • The H keeps the FMH and pays the W £55,000 in two tranches: £20,000 immediately, and £35,000 within 24 months;
  • In absence of these payments, sale of the FMH with £55,000 given to the W;
  • The H retains responsibility his matrimonial debts; and
  • A 50% pension share from the H to the W.

Conclusion

Despite a “modest departure from equality” in the W’s favour the H was able to retain the FMH. In a case of limited assets, the Judge’s decision satisfied the parties’ opposing proposals and achieved a clean break which created two households able to meet their needs independently.

District Judge Hatvany’s decision demonstrates that fairness does not necessitate equal division and that the court must be unafraid to depart considerably from equality when circumstances require it. A creative solution may be required to meet the parties’ needs and achieve a clean break in low assets cases.

In making a 50% pension share from the H to the W District Judge Hatvany emphasises that, absent actuary reports, there should be equal division of parties’ pensions.

Thomas Wheddon/John Franklin