Divorce — Financial provision — Valuation of matrimonial property — House in joint names — Orders for transfer of property and payment of capital sum — Application of principle of equal division — Whether competent to take into account change in value of property between relevant date and date of divorce — Sheriff’s court holding that wife entitled to half share in increase in value of house between date of separation and proof — Court of Session allowing appeal — House of Lords dismissing appeal
A husband and wife lived and held the title of 10 Rosebank Avenue, Falkirk, which at the time of their separation was in joint names. After their separation the husband continued to live in the house and to conduct his business from it. In 1988 he raised an action of divorce against the wife. The matrimonial property was then worth £44,000, subject to a mortgage redemption of £26,600 (£17,400 net), its current value being £68,000. The husband was ordered to pay to his wife the sum of £31,450 and the wife was to transfer to the husband one half share of the former matrimonial home. The sum of £31,450 included one half of the net value of the house at the date of separation (“the relevant date”) (£8,700) plus one half of the increase in its value since that date (£12,000). The husband appealed to the Sheriff’s court, contending, among other things, that the capital sum payable by him to the wife should be reduced by one half of the increase in the value of the former matrimonial home between the relevant date and the date of proof. The reduction by £12,000 would result in a capital sum payable of £19,450. The appeal was refused, but the Court of Session allowed an appeal against that refusal to the effect of substituting £19,450 for £31,450 as the capital sum payable by the husband. The wife appealed to the House of Lords.
Held The appeal was dismissed.
1. Section 9(1)(a) of the Family Law (Scotland) Act 1985 provided that the net value of the matrimonial property should be shared fairly between the parties to the marriage.
2. For the purposes of the division contemplated by that provision, the matrimonial home was to be valued as at the relevant date and, in the absence of special circumstances, the net value at the date was to be divided equally between the parties.
3. It seemed to make no difference, in principle, which party owned the property in question at the relevant date, or that it was owned jointly.
4. The principles of the 1985 Act could not justify more than half the net value of the house being paid to the wife, upon an equal division of the net value of the matrimonial home at the relevant date. There was nothing in the Act capable of justifying a division between the parties of the increase in net value which had taken place at the time of proof.
Donald MacFadyen QC and Charles Macnair Adv (instructed by Reynolds Porter Chamberlain, London agents for Brodies, of Edinburgh) appeared for the wife; the husband did not appear and was not represented.
