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[2017] CSOH 93




In the cause






Pursuer:  Hayhow;  Lindsays

Defender:  J Scott QC;  Turcan Connell

23 June 2017


[1]        This is an action for divorce, in which the dispute is as to the orders that should be made for financial provision in terms of the Family Law (Scotland) Act 1985.  As that is the only statute mentioned in this Opinion, further reference to it is by way of section number only.

[2]        The parties were married on 22 December 2001.  I am satisfied by corroborated evidence on the basis of the affidavits produced that the parties have not lived together as man and wife since 5 September 2014, and that there is no prospect that they will reconcile.  The marriage has broken down irretrievably, and I grant decree of divorce in terms of the pursuer’s first conclusion.

[3]        There is one child of the marriage, S, born on 15 April 2002.  He lives with the defender.  I am satisfied that no order under the Children (Scotland) Act 1995 is necessary in relation to him.  He attends an independent school in Edinburgh as a day pupil.  The pursuer pays the fees, and intends to continue to do so.  Although there is a conclusion relating to the payment of fees, I am not asked to grant any order in terms of it.

[4]        The pursuer contends that the matrimonial property ought not to be shared equally because, he says, its net value at the relevant date derives very substantially from his gifted, inherited, or pre-marriage property.  He seeks an order that the matrimonial home and two other items of heritable property jointly owned by the parties should be sold, and the net free proceeds divided in the proportion of two‑thirds to him, and one third to the defender.  He seeks ancillary orders that the contents of the heritable property should, so far as comprising matrimonial property, be divided equally by value between the parties;  and allowing the defender to retain as her own property the funds held by the firm of A in the TSB bank account no ****9203 as from the date of sale of the heritage at commercial premises in Morningside.  He seeks a further ancillary order finding him entitled to attend at the matrimonial home and to remove such of the furniture and plenishings within the property as were inherited by him or acquired by him prior to the parties’ marriage.  He accepts that he should pay periodical allowance, and seeks an order finding the defender entitled to it at the rate of £1000 per month for six months from the date of decree of divorce;  and thereafter at the rate of £500 per month for a further six months with interest on any unpaid instalment.  He seeks also an order transferring title to his Mercedes car (registered number ST** **V) to the defender.

[5]        The defender agrees that the matrimonial home should be sold, and seeks an equal sharing of the net free proceeds.  She seeks transfer to her of the pursuer’s interest in each of the other two heritable properties, transfer to her of the Mercedes car, a capital sum, which failing, a pension sharing order, and a periodical allowance of £1,700 per month for 18‑24 months.

[6]        Parties agree that the relevant date is 5 September 2014.  There is very little dispute as to what was the value of the matrimonial property at the relevant date, nor as to its value.

[7]        The matrimonial property and the relevant date values are set out in the following table.  I deal below with each of these items in turn.  In the table P=pursuer; D= defender; Jt=joint.







Heritable Property

The matrimonial home



less First Direct (Santander) mortgage ***1639



Commercial property, Morningside



less Jt TSB loan a/c ***7400



Jt Flat, Jeffery Street, Edinburgh



less Coventry BS mortgage ***9901




Jt contents of matrimonial home



Jt contents of Flat, Jeffery Street



Investments / Pensions/ Bank Accounts

Jt First Direct bank a/c ***5715



P's Hargreaves LansdownVantage ISA



P's Hargreaves Lansdown Vantage SIPP



P's First Direct bank a/c ***1723



P's First Direct bank a/c ***1731



P's interest in MOD pension scheme



D's First Direct Bank a/c ***4561



D's Bank of Scotland a/c ***2154



D's Hargreaves Lansdown Vantage SIPP



D's Hargreaves Lansdown Vantage ISA



D's Barclays ING a/c ***9682



D's Bank of Scotland a/c ***2190



Miscellaneous Items

Jt interest in MC Ltd



Jt Interest firm of A a/c ***9203



P's Mercedes car



P's Army Reserve Pension



P's loan to mother's estate



D's Additional State Pension



Total Net Assets






[8]        I heard some evidence as to the financial and non‑financial contributions of the parties during the marriage.  There was reference to efforts of the defender regarding the letting and marketing of various properties, the care of Mrs A (the pursuer’s mother) as her health deteriorated, and the management of improvements to the matrimonial home, and strictures resulting from the expectations placed upon her as the wife of a serving officer.  The pursuer contended he had suffered some degree of career disadvantage by reason of seeking postings that served the needs of the family, that he had made various payments in respect of the Comiston Place property, towards the support of M (the defender’s daughter), and her education, and that he had made various other payments.  Both parties, however, accepted in their submissions that economic advantage and disadvantage, for the purposes of section 9(1)(b) was evenly balanced.  I will not therefore analyse here the evidence in relation to these matters.  I should say that I would in any event have reached the conclusion at which parties arrived in their submissions.

[9]        The focus of discussion therefore came to be upon how sections 8(a) and (b), 9(1)(a), (c), (d), (e) and 10(b) should be applied in the circumstances of this case.



[10]      The pursuer’s father died when he was a child, and he inherited money.  The pursuer brought investments to the marriage.  There is vouching in 6/103 of their value at 30 November 2001, which was £102,548.  The pursuer says that he transferred the money from Gerrards Investment Funds to Hargreaves Lansdown in 2005, and there is a statement from the latter (6/104) showing an investment portfolio worth £102,211 as at 31 October 2005.  He owned a flat in Henderson Row, Edinburgh.

[11]      During the marriage the pursuer inherited a further £10,686 from his father’s estate, which came to him on the expiry of a liferent in favour of his mother, Mrs A.  He received a total of £235,055.39 from the estate of his aunt, EG.  That was paid out to him mainly in the course of 2008, with two further payments in 2009 and 2014.  He inherited £24,578 from his godfather, FM, which he received on 17 February 2014.  Mrs A gifted sums totalling £232,200 to the pursuer.  Those gifts were made under a power of attorney granted by her to the pursuer and the defender.  After Mrs A’s death he received £140,172.67 by way of the proceeds of a life insurance policy, the residue of her estate in the sum of £23,425, a share portfolio, and heritable property in Bamburgh.  Mrs A died on 16 September 2013.

[12]      Before the marriage the defender owned a flat in Comiston Place, Edinburgh.  The defender had a child, M, from a previous relationship, who is now an adult employed as a teacher in Edinburgh.

[13]      During the marriage the flat at Henderson Row was let, until its sale in 2007.  The defender still owns the Comiston Place flat, which has a present day value of £225,000.  The pursuer avers that he used non‑matrimonial funds to pay down the defender’s mortgage and to fund improvements.

[14]      When the parties married, the pursuer was a captain in the British Army.  The defender was the branch manager of a firm of estate agents.  

[15]      For much of the marriage the pursuer served as an officer in the Army.  He was promoted to the rank of major.  During the marriage he had overseas postings in the Czech Republic, Iraq and Afghanistan, and postings in the UK in Edinburgh, London, Shrivenham, Bovington and Perth.  As a major, by the end of his Army career, he earned about £56,000 per year.  Following the end of his army career in 2013 he worked for Bank X on a consultancy basis.  That contract came to an end and he had a period of unemployment before taking up employment with Bank Y.  As at August 2016 his annual gross pay was £76,500.  He is still employed by Bank Y, earning approximately £95,000 per year.

[16]      Since the relevant date the pursuer has received further sums by way of inheritance, totalling £579,828.76.

[17]      The pursuer received redundancy and resettlement payments from the Army in 2013.  He avers that part of those sums is attributable to his pre‑marriage service, in the context of a claim that he applied the sums he received to support the defender and towards certain of the matrimonial property.  A legal issue arose as to whether payments of this type fell to be assessed in the same way as the value of pensions; that is, whether a particular proportion ought to be regarded as matrimonial property as deriving from the period attributable to the marriage.  I return to that later.

[18]      For the most part the defender continued to live in Edinburgh during the marriage.  She joined the pursuer for several months from August 2004 to June 2005 in Shrivenham.  M was at boarding school nearby.  During that period the defender travelled back to Edinburgh every week to stay with friends and pursue her business interests.

[19]      The pursuer says that he asked for particular postings on three occasions to meet the defender’s needs.  In 2002 he asked to leave the Czech Republic posting early because there was no suitable local schooling for M.  He was selected for a posting in Northern Ireland in 2005, but asked for a posting in Edinburgh to allow the defender to pursue her business.  In 2011 he asked to leave Bovington early to be closer to the defender who by that stage was unwell.  He considers that these requests for moves on welfare grounds damaged his career, and contributed to his eventual selection for redundancy.

[20]      The defender gave up her employment after S’s birth, but in 2002 began to trade as a self‑employed sole trader providing property support services, in the form of preparing properties for sale, producing sales particulars and advertising, organising work necessary for houses in multiple occupation, and carrying out viewings for estate agents and solicitors.  The business was known as LPS.  It later became incorporated as LPS Ltd.  The business stopped trading in 2011, demand for its services having diminished following the downturn in the property market.  The defender gave evidence that in 2006 the business was valued at £25,000 and that her turnover peaked in 2009 at £65,000 per year. 

[21]      The extent of the defender’s income from these activities is entirely unclear.  Only in relation to the final financial year of trading are full accounts and financial statements available.  At that stage the company was trading at a loss, despite a turnover of £61,166.  The defender says she has destroyed the documents relating to the earlier years.  I have been provided with virtually no information in relation to the profit from the self‑employed business or the company, or the extent of the defender’s income from the company.  The defender did not produce information from HMRC as to what she had told them her income was during these periods.

[22]      Abbreviated accounts are available for LPS Ltd for half year to 31 August 2006 and years to 31 August 2007, 2008, 2009, 2010 and 2011 (6/62-6/67).  Only for 2011 are financial statements produced (6/68).  There is no vouching of turnover or profit other than the figures for the years to 31 August 2010 and 2011 in 6/68.  There is nothing to indicate what the defender may have taken as salary or by way of loan from the company during the years for which abbreviated statements are available.  The figure for directors’ salaries in the year to 31 August 2011 was £2,000 and £4,400 for the previous year.  Turnover is said to be £10,548, and the figure for turnover in the year to 31 August 2010 £61,166.  The business made a loss in 2011 and a gross profit of £8,143 in 2010 £5,972 after tax.  There is nothing to indicate there was any loan to the defender outstanding in 2010 or 2011.

[23]      Against this background, if the defender is right that her turnover peaked in 2009 at about £65,000, it is difficult to see how the profit or her salary that year would have been very much higher than in 2010.  Such figures as are available indicate that her business cannot have been a substantial source of income for the family.

[24]      The pursuer’s evidence is that he had no idea how much the defender earned during the marriage.  This is also a curious feature, at least in relation to the period after the business was incorporated, given that he was the secretary of the company.  He says that the defender’s money was “her own”.  He accepts that she transferred money to him regularly.

[25]      The defender says that for much of the marriage her financial contributions were broadly equal to those of the pursuer, and that at certain points her earnings exceeded those of the pursuer.  She says that she transferred £164,909 to him between 2003 and 2011.  Although the pursuer does not dispute that the defender transferred money to him, it is far from clear to me where that money came from.  It is not disputed that the pursuer paid large sums to the defender with a view to spreading the risk in relation to the level of protection available to account holders against the failure of financial institutions, particularly in 2007 after he inherited money from his aunt EG, and after a gift from his mother (actually made by the pursuer and the defender exercising a power of attorney granted to them by her) in 2010.

[26]      The defender says that she cashed in two policies which she held before marriage and applied them towards matrimonial property.  The first of these was an Eagle Star policy.  It is clear from 7/117 that this policy was encashed in March 2001, nine months before the parties married, and I do not accept that it was applied as a source of funds for matrimonial property.

[27]      The other policy was cashed in in June 2004 (7/123).  The defender says that she paid the proceeds to the pursuer.  7/123, which is an extract from a bank statement, shows a transfer out of £10,000 three days after the proceeds were paid in, but does not disclose the destination.

[28]      The defender produced a schedule, 7/114, which she said detailed payments made by her to the defender between 2003 and 2013.  The schedule is cross‑referenced to other productions which the defender says vouch her position.  It does not include the figure of £10,000 just mentioned.  The various bank statements to which reference is made in 7/114 mostly show payments made either to the pursuer or to the pursuer and the defender, presumably references to accounts in his name or an account in joint names.  

[29]      Exceptions are

(a)        7/166, which shows a cheque withdrawal from the defender’s business account of £7,000.  There is no further documentary vouching as to the beneficiary of the cheque.  

(b)        7/132 shows a payment of £4,000 on 19 April 2007 simply to “RBOS” without further information as to the recipient account.

(c)        7/161 vouches a payment of £16, 530.74 being made to an unidentified nominated bank account deriving from a Hargreaves Lansdown Maxi ISA.  There is a handwritten note on the document which refers to the matrimonial home.  The date of the document is 21 June 2007, which is consistent with the payment being connected in some way to the acquisition of the matrimonial home.  The pursuer’s evidence about this payment, which I accept, was that the original source of funds for the ISA was money inherited by him.   He refers in paragraph 9(6) of his affidavit to this payment as part of the source of the deposit for the matrimonial home.

(d)       7/162 indicates that payments on 1 March 2012 and 4 April 2013 came from the “Firm of A” in which the pursuer was a partner.

[30]      I note that a payment out to the pursuer in March 2007 corresponds directly to a payment in from Alba Lettings, who by that stage managed the letting of the Henderson Row property (paragraph 37 of defender’s affidavit).  There is a payment to the pursuer in precisely the same sum in April 2007.  It bears a handwritten annotation indicating that it represents the rent for Henderson Row.  These payments to the pursuer are of income deriving from his own property, although they are coming through the defender’s account. 

[31]      The defender says in her affidavit, to which further bank statements are appended, that she made further payments in 2004, 2005 and 2007 totalling £15,000. 

[32]      The pursuer, broadly speaking, accepted that the defender had made payments to him.  He said that they were to meet the costs of living, and that the source of funds was the defender’s business.  There were payments the source of which he did not know.  In summary his position was that the payments listed by the defender were, subject to some exceptions, income generated by her during the marriage, or the migration back of capital that he had paid over to her.  

[33]      The source of the funds from which the defender made payments to the pursuer is not clear.  Taking the figures offered by the defender at their highest, they amount to contributions on her part averaging about £16,500 per year.  Leaving out of account the sums mentioned in paragraph 29 the average is nearer to £13,500.  The figures simply do not bear out the assertion by the defender at paragraph 20 of her affidavit that for much of the parties’ marriage their financial contributions were broadly equal.  They cannot derive wholly from the activities of LPS Ltd for the reasons I have already indicated.

[34]      In about 2007, Mrs A, the pursuer’s mother, began to experience some degree of cognitive decline.  She moved to live with the defender in the matrimonial home in October 2007.  She granted a continuing and welfare power of attorney in favour of the pursuer and the defender.  It became apparent that she was suffering from a rapidly progressing form of vascular dementia.  She was admitted first to hospital, then to a care home.  Her condition proved to be difficult to manage, and, as a result, a different care home placement was required.  The defender was the point of contact for those providing residential care throughout those difficulties and changes.  She corresponded with other family members to keep them informed as to Mrs A’s situation.

[35]      The defender has had endometriosis for many years.  She required surgery for it in about 2011.  That is not disputed.  She avers that she suffers from other conditions, including a cellular mitochondrial dysfunction which causes chronic fatigue syndrome.  The latter is not vouched by medical evidence.  There was an issue raised at the start of the proof regarding a letter from Dr Carswell, the defender’s general practitioner, lodged, not as a production, but as part of the appendix to the defender’s affidavit after the time for lodging productions had expired.  The pursuer objected to the admissibility of evidence from Dr Carswell.    Having considered matters, Mrs Scott made it clear that her intention, so far as medical evidence was concerned, was simply to rely on the letter from the defender’s general practitioner.  It was perhaps unfortunate, given the terms of the interlocutor of 9 December 2016, which I read as requiring reports from expert witnesses to be lodged as productions, that this document was introduced in the way that it was.  It seemed to me, however, that there was no real prejudice to the pursuer in allowing the defender to rely on the letter from Dr Carswell as representing her factual evidence as to the reports made to her by the defender and others.  I noted that it contained no opinion as to the causation of the defender’s symptoms or the prognosis.

[36]      It was put to the defender that Dr Myhill, who had advised her in relation to mitochondrial dysfunction, was a controversial figure who had been the subject of sanctions at the hand of her professional body.  The defender, perhaps understandably, as she reports improvements in her condition, was largely uninterested in Dr Myhill’s professional difficulties.   The defender followed advice from Dr Myhill.  She experienced improvement in her symptoms after she had done so.   The defender believes that her following the advice and the improvement are related to each other.  

[37]      The evidence of Dr Carswell, such as it was, and the defender’s response to questioning about Dr Myhill, added little.  I have no difficulty, however, in accepting that the defender has since 2011 experienced difficulties which continue to impair, at least to some degree, her ability to work.  There is no medical evidence in relation to any prognosis.  The defender has found that she has been able to improve and manage her condition.  What is more, she has started an online business to assist other women who have endometriosis, and has published electronically two books on the subject.  She has started a self‑employed business offering advice to women regarding natural remedies for endometriosis.  I accept that she is motivated to develop that business.  In that regard I accept her evidence, and the affidavit evidence of her business consultant, Mr Christian Fioravanti, regarding the steps she has already taken to develop her business, and her motivation and determination to do so.  Her business is not yet profitable.

[38]      The defender receives the proceeds of an income protection insurance policy from Scottish Provident.  When her business becomes profitable, her income from it will be deducted from the monthly payments.

[39]      At the time of the Proof M still lived in the matrimonial home with the defender and S.  M is employed as a teacher.

[40]      For a substantial period after parties separated, the pursuer lived rent free in the defender’s flat at Comiston Place.  He continued, however, to pay the mortgage on the matrimonial home.  He now lives in rented accommodation.


The Matrimonial Home

[41]      The matrimonial home was purchased on 9 July 2007.  The purchase price was £757,070.  The parties obtained mortgage lending of £299,970.  The pursuer transferred £161,000 from his current account to the parties’ solicitor by way of deposit.  The proceeds of sale of his flat in Henderson Row, £253,233, were applied to the purchase, for which a bridging loan was required pending the completion of that sale.  His mother, Mrs A, contributed £75,000.  The parties took title in equal shares, with a survivorship destination.

[42]      The source of the £161,000 is detailed in the pursuer’s affidavit at paragraph 9(1)‑(6), and by reference to 6/108, a bank statement showing transfers in from Hargreaves Lansdown investments.  All but £25,060, which came from the pursuer’s savings account, came from Hargreaves Lansdown.  The pursuer says two further sums from Hargreaves Lansdown, totalling £20,246.30, were used to pay for works to the matrimonial home in 2007.  The sum mentioned in paragraph 9(6) is the sum derived from the ISA in the defender’s name referred to in 7/161.

[43]      There is a dispute as to whether the sum of £75,000 was a gift from Mrs A to the pursuer alone, or to the pursuer and the defender together.

[44]      The defender contends that the £161,000 contributed by the pursuer did not come only from his inherited wealth, but from contributions she had made during the preceding years of marriage, in the form of sums she had transferred to his current account.  In her evidence, under reference to 7/114, already referred to, she indicates that she transferred sums to the pursuer throughout the marriage.  Most of these sums are relatively small, and it is impossible in my view to take the view that they can properly be regarded as a source of funds for the matrimonial home, rather than contributions to living expenses generally.  As I have already observed, their source is not entirely clear.  An exception is the sum derived from the defender’s Hargreaves Lansdown ISA.  That does not, however, assist the defender regarding the source of funds for the matrimonial home, as I accept that the ISA itself was funded by the pursuer’s inherited wealth.

[45]      The defender did not sell her own heritable property at Comiston Place to fund the purchase.  There was some evidence as to why she did not sell it to do so, and whether there was agreement between the parties that she should not.  I do not regard the matter as material.  What is clear is that the defender did not contribute capital from non‑matrimonial property towards the purchase price of the matrimonial home.

[46]      In relation to the sum of £75,000, the pursuer says that Mrs A was particular about money remaining in the family.  It would have been a potentially exempt transfer for the purposes of inheritance tax, and she had been actively engaged in planning so as to minimise liability for inheritance tax.  She did not leave any money to the defender, although her Will was drafted before the relevant date, showing that she was not of a mind to confer a benefit directly on the defender.

[47]      There seems to have been discussion, at least between the pursuer and the defender, in the first place as to whether Mrs A would lend them money to assist with the purchase.  7/429 is a handwritten letter from the pursuer to the defender regarding the purchase and proposed renovations in which he writes, “I think a lot will depend on how much money Mum is able to lend us.”  The defender says a loan was discussed with Mrs A, but that she preferred to give the parties the money.

[48]      Mr Desmond Coyne, a solicitor who acted for the parties in the acquisition of the various heritable properties, was asked about this matter.  Although in his affidavit he states that he was informed that the money was a gift to both parties, I was unable to gain any clear picture from his oral evidence as to just how or by whom that had been conveyed to him.  His evidence on the point did not assist me in resolving the issue.

[49]      I heard oral evidence from Mrs L, the sister of Mrs A.  She was adamant that Mrs A would not have gifted money to the defender.  According to her, Mrs A had a strong belief in keeping money in the family.  It became clear in the course of her evidence that Mrs L would have liked to have cared for Mrs A herself.  She did not understand that Mrs A had granted a power of attorney in favour of the defender as well as the pursuer.  She believed that Mrs A had wished to stay with her (Mrs L), but had been “overruled”.   In her bearing and tone in giving evidence she evinced dislike for and hostility towards the defender.  She sought to minimise the extent to which the defender had been involved in Mrs A’s care.  She said, for example, “[the defender] did the caring for [Mrs A], if you can call it that, in the absence of [the pursuer]” (emphasis added).  That seemed to me to be both unkind and unfair to the defender, given what I accept was her involvement in Mrs A’s care.  The pursuer in his own evidence acknowledged that there had been “friction” between Mrs L and the defender.  I am therefore very cautious in placing any reliance on evidence that she gave adverse to the interest of the defender.

[50]      The pursuer also insisted that the gift was to him alone.  Perhaps tellingly, however, in his oral evidence, the pursuer said, “I asked her to help us with the purchase.”  He confirmed that Mrs A was aware that title to the matrimonial home would be taken jointly by him and the defender.

[51]      It is hard to reconcile a determination on the part of the late Mrs A to make a gift to her son alone with what the pursuer acknowledged was her knowledge, as an astute woman, that title to the property would be taken in joint names.  She paid the money directly to the parties’ solicitor for the purposes of the transaction, and not to the pursuer himself.  The late Mrs A also granted a continuing power of attorney in favour of the pursuer and the defender, which tends to show a degree of trust on her part in the defender, not least in relation to financial matters.  Mrs A’s dispositions of funds available to her were such that she did not pass funds to her own daughter because she believed that the latter would dissipate them.  I find it difficult to accept that such a hard‑headed individual would have paid money directly to a solicitor in respect of a transaction that was to fund a joint purchase had she not intended to confer a benefit upon both the purchasers, namely the pursuer and the defender.

[52]      The defender gave evidence of a conversation with Mrs A in which the latter spoke of making the gift to both parties.  I regarded the evidence of the defender of her conversation with the late Mrs A as credible and reliable.

[53]      Having considered all of these matters, I am satisfied on the balance of probabilities that the sum of £75,000 was gifted to both the parties, and not to the pursuer alone.

[54]      The pursuer applied £87,000 from non‑matrimonial funds (inheritance from EG and a gift from his mother) to paying down the mortgage on the matrimonial home.  Following these payments, the property was remortgaged with First Direct.  Before that, the mortgage had been one in which payments went to interest only.  After the payments down of the mortgage and the remortgage, the mortgage was one in which payments went to both capital and interest.

[55]      The pursuer says he expended a total of £119,477 on renovations of the matrimonial home funded from money invested with Hargreaves Lansdowne and encashed at around the time of the purchase, and from an inheritance from his aunt, EG, received in 2008.  I accept, given the close relationship in time between the payments in from Hargreaves Lansdown in 2007 and the works, and between receipt of funds from the estate of EG in 2008 and the works carried out at that time that the pursuer’s non‑matrimonial property funded those works.  I do not consider, however, that the source of funds for renovations carries as much weight in this case as regards the division of the property as does the source of funds for purchase.  There is no clear correlation between the expenditure and the increase in value of the property, which was £67,930 between purchase and the relevant date.  I have no reason to doubt that the work enhanced the value of the property, which is the view of both parties and of Mr Rafferty, a builder whose firm carried out some of the work, but the level of expenditure is much more than the extent of the increase in value.

[56]      The defender contends that she took part in managing the letting of the Henderson Row flat, and also that it was as a result of her advice, based on her professional experience, that the pursuer deferred selling it, thereby making a larger profit on the sale than he otherwise would have done.  I am asked to take that circumstance into account when considering the circumstance that the purchase of the matrimonial home was funded in part by the proceeds from Henderson Row.  The pursuer’s position is that they agreed that the price obtained when it was offered for sale in 2004 was insufficient, and that the defender did not require to persuade him of that.  I place no weight on these circumstances.  I accept that the defender took an active role in managing the property while it was let.  Although it was let through agents I have no difficulty in accepting that even with the involvement of agents there would have been correspondence required with them and tasks needed “on the ground” which fell to the defender in the pursuer’s absence.  I do not accept that the defender persuaded the pursuer not to sell in 2004 or that she did so on the basis of any particular professional acumen.  As Mr Coyne accepted in his evidence, it was known generally in 2004 that the value of heritage in Edinburgh was rising, and anticipated that it would continue to do so.

[57]      It may well be right that work done to the matrimonial home enhanced its value.  I can accept that it was probably substantially arranged and conceived by the defender rather than the pursuer.  Its cost, however, was met from the pursuer’s funds.  The deposit for the matrimonial home derived overwhelmingly from funds inherited by or gifted to the pursuer.  He paid down the mortgage using non-matrimonial property.   Leaving out of account entirely the disputed £75,000 and the cost of renovations, he contributed £503,000 from non‑matrimonial funds to a property that had a net value at the relevant date of £650,641.  The current value of the matrimonial home is £850,000 and the mortgage is £175,000. 


Commercial Property, Morningside

[58]      The property is shop premises.  It was purchased in May 2008 for £115,000.  The pursuer paid £32,220 by way of deposit, having shortly before received part of the inheritance from his aunt EG.  I accept, given the clear coincidence in timing, that the deposit was funded from the pursuer’s inherited wealth.  The parties formed a partnership at will, known as the firm of A.  The parties took title to the property as partners in the firm of A.

[59]      The defender was tenant of the premises and traded from them, LPS Ltd.  LPS Ltd paid rent to the firm of A.  LPS Ltd relinquished the lease in 2010.

[60]      LPS, as a commercial tenant, paid for the refurbishment of the property.  The defender raised funds for the refurbishment by remortgaging the Comiston Place property.  There was some discussion as to whether I could take account of that at all, given that the arrangement was one of a commercial lease.  The question does not seem to me to be material.  There is no evidence that the shop premises, which are matrimonial property, actually increased in value by reason of the investment made in it using the funds raised by the defender from Comiston Place.  The pursuer suggested at one point in his evidence that the sum was a loan by the defender to LPS.  There is nothing in the very limited financial records of LPS that have been produced to show that it was treated as a loan, or, if it was, whether it was ever repaid to the defender.

[61]      In December 2014 the pursuer says that he paid £8,207.94 for work to meet statutory notices using funds derived from Mrs A’s life assurance policy.  The defender says that these sums were met from a retention from the previous proprietors at the time of purchase.  I am unable on the available evidence to come to a view as to the source of funds for these repairs.  I do not in any event regard the matter as bearing materially on the proper division of matrimonial property overall. 

[62]      Since separation the defender has had the benefit of the whole net rental income from the property.  The loan repayments in respect of the mortgage are met from the bank account of the firm of A, and are covered by the rent.  The relevant date value was £120,000, subject to a mortgage of £51,614.  The premises are currently valued at £150,000 and the mortgage is £39,000.


Flat, Jeffrey Street Edinburgh

[63]      The parties purchased this property in joint names in 2006 for £136,700.  The purchase was funded by a deposit of £47,911 and a mortgage.   The pursuer remortgaged Henderson Row to the extent of £35,000, which formed part of the deposit.  That is not disputed, although the defender claims that the parties would have been able to fund the deposit from their savings without remortgaging Henderson Row.  That proposition by her is unvouched by any evidence in relation to savings deriving from the efforts of the parties during the marriage.

[64]      The defender asserts that part of the deposit was funded by a Sun Life policy she had held prior to marriage, and the proceeds of which she had paid to the pursuer in the period prior to 2006.  This policy was encashed in 2004, some time before the purchase.  The pursuer accepted that it was paid into a joint savings account.  I do accept that it represented a contribution of capital to the funds available to the family, by the defender in 2004.  I accept that, given the date, it probably derived principally from premiums paid before marriage.  Given the temporal gap, however, I am not satisfied the proceeds of the policy funded the deposit. 

[65]      The defender also claims, at paragraph 46 of her affidavit, that the sums listed in 7/114, which she also says formed part of the deposit for the matrimonial home, were a significant source of the funds for the deposit towards this property.  On the basis of the view I have already expressed about the payments set out in that production, I do not accept that she is correct about this.

[66]      The pursuer paid down the mortgage by a total of £16,102 in 2013 and 2014, funded from his early departure payment, terminal grant and maximum resettlement commutation lump sum on leaving the Army, and by proceeds of his mother’s life assurance policy and further proceeds of his father’s estate.  The terminal grant and maximum resettlement commutation lump sum are the sums listed at points 2 and 3 in 6/35 of process, £54,259.74 and £30,166.26.  The resettlement commutation resulted in an abatement from the pursuer’s pension.  The early departure payment, of £43,518.78

[67]      The pursuer paid £8,001 on 24 June 2013, having received the sums from the MOD on 14 and 21 June.  I accept, given the close relationship in time between the two, that part of the sums received funded the payment.

[68]      The pursuer paid £8,101 on 24 June 2014.  I note that he says that he received £10,686.05 on 2 July 2014 following the winding up of a trust account relating to his late father’s estate (pursuer’s affidavit paragraph 6(1a)(v) and 6/88).  The dates on which he received the payments from Mrs A’s life policies is not shown on 6/79.  Although those dates are not known, and the payment from the pursuer’s father’s estate slightly postdates the payment, I consider that it is more likely than not that the payment would not have been made were funds not either available or imminently available from the sources identified by the pursuer, and that it is proper to regard the payment as funded by those sources.  I accept the evidence of the pursuer that the parties’ expenditure exceeded their income at that time.

[69]      There is an issue about whether funds deriving from the resettlement commutation and terminal grant should be treated as deriving from non-matrimonial property.  The pursuer argues that the amount of the payments was related to his years of service, and that part of his service was during a period prior to his marriage.  He argues that there is an element of that which is not derived from the income or efforts of the parties during the marriage.  Dr John Pollock, consulting actuary, was called to give oral evidence about this matter alone.  He accepted the point put to him by Mrs Scott – although it really is a point of law – that there are regulations which prescribe the way in which the proportion of the value of a pension is to be deemed attributable to a party’s marriage.  He made the point that while the lump sum generated from a pension is directly proportional to service, the calculation of a “redundancy” payment may not be directly proportional to service.  The payments were referred to in submissions as a redundancy payment, and I proceed on the basis that they were payments of a similar nature.

[70]      I was referred to R v National Insurance Commissioner ex p Stratton [1979] 1 QB 361 and Wilson v National Coal Board 1981 SC (HL) 9 regarding the nature of a redundancy payment.  The payment is made because the employee is regarded as having an accrued right in his job, which is of the nature of a proprietary interest.  If he is deprived of it he should receive a capital payment to compensate him for the loss of it.  The payment is not for loss of future income, but to compensate him for the loss of his job: ex p Stratton, Lord Denning MR at page 370D.  Although the amount of payment is related to length of service and to the level of past remuneration, it does not in any sense constitute compensation for loss of earnings:  Wilson, Lord Keith of Kinkell at page 20.   In Tyrrell v Tyrrell 1990 SLT 406 Lord Sutherland declined to treat a redundancy payment as matrimonial property.   In that case redundancy occurred after the relevant date, and there could be no question of any right to the payment having vested before separation.

[71]      I note that I am not asked to determine whether the payments are matrimonial property.  The payments are not said to be matrimonial property in existence at the relevant date.  If that were the issue, I would be reluctant to determine what was matrimonial property by regarding any particular proportion of the payments as referable to the period during the marriage but before the relevant date.  Special provision is made in section 10(5) for life policies and similar arrangements, and for benefits under a pension arrangement.  No such provision is made for other types of payments.   As redundancy payments are compensatory in character, there might also be questions as to the extent to which analogies should or should not properly be drawn with vested claims for damages, or particular elements of such claims.    The argument made, however, is that part of the matrimonial property, namely the flat, was acquired using funds or assets not derived from the income or efforts of the parties during the marriage.  In principle, it seems to me that if it were proved as a matter of fact that a redundancy or similar payment, or a clearly identifiable part of it, did not derive from the income or efforts of parties during the marriage, and it were used to acquire matrimonial property, then an argument could properly be made under section 10(6)(b).

[72]      I do not know how the payments were calculated.  I do not know whether they were calculated in a similar way to the pursuer’s pension.  In that situation I do not consider that I am in a position to apportion any particular part of it to the period of the marriage, regardless of my view as to the correct approach in law to the payments.  I am not in a position to conclude that it represented a fund which did not derive from the efforts of the parties during the marriage, or, if it was, to what extent that might be the case.    The pursuer became entitled to these payments during the marriage and before the relevant date, and received them during that period.  

[73]      In relation to the property at Jeffrey Street, that means that I am prepared to hold that the pursuer contributed a total of £43,101 from sources not derived from the efforts of the parties during the marriage.  The net value at the relevant date was £82,058.  Its current value is £175,000, subject to a mortgage of £73,000.


Contents of Matrimonial Home and of Flat

[74]      There is no dispute as to the value of the contents of the matrimonial home insofar as they are matrimonial property.  

[75]      The value of the contents of Jeffrey Street is disputed.  The pursuer on a very broad basis thought they were worth £1,000.  It was not suggested to the pursuer that he was wrong about this, although the defender’s position was that they should be regarded as having a value of nil.  On the available evidence I value them at £1,000.  It is unlikely in my view that the contents of a furnished flat that has been let are either materially more or less than that.  It is unlikely that they have a value of nil.


First Direct Bank Account in Joint Names

[76]      This had a balance of £89,951 at the relevant date.  The pursuer’s position in his affidavit was that the balance derived from the proceeds of Mrs A’s life insurance policy, which he received in June 2014, payments from his godfather’s estate, and from the sale of assets held in trust from his late father’s estate.  In the 18 months preceding separation it is plain that the pursuer received significant sums by way of inheritance, but also sums derived from his service in the Army.  There is no clear evidential basis for finding that any particular proportion of this balance was acquired by way of succession, although I accept that a portion of it, and probably a significant proportion of it, will have been acquired in that way.

[77]      The pursuer withdrew funds after the parties separated.  He says that he was unemployed until March 2015 and required to live off the funds in the account.  He continued to pay the mortgage for the matrimonial home, S’s school fees and contributions for M’s expenses while at university.  

[78]      It is not disputed that the pursuer withdrew £4,000 on 3 September 2014, that is two days before the relevant date.  It is also not disputed that after the relevant date the defender withdrew £8,000.  The pursuer claims, and the defender disputes, that she also withdrew £3,000 after the relevant date to pay for cosmetic dentistry.  The defender says that she paid for dentistry using part of the funds retained in relation to repairs to the Morningside property.

[79]      I regard the withdrawal of £4,000 as irrelevant.  It took place before the relevant date.  I accept that the pursuer used it to buy a second hand car in circumstances where the defender had sole use of a Mercedes car to which he had title.  The withdrawal of £8,000 by the defender falls to be taken into account as matrimonial property effectively retained by her.  I am unable on the evidence to make any finding as to whether or not she withdrew a further £3,000, and therefore leave that sum out of account.


Pursuer’s Hargreaves Lansdown ISA and SIPP

[80]      These had a total value at the relevant date of £121,168.  The pursuer says that these were acquired using non‑matrimonial property, with the exception of £10,000 paid to the SIPP in 2013/4.  The pursuer says that after cashing in investments to fund the purchase of the matrimonial home, he began again to invest money, using money that he inherited.  At paragraphs 19 and 20 of his affidavit he details payments in to the SIPP and the ISA, and sets out how the dates of those payments correlate with the receipt by him of inherited funds.  I accept that the value of these investments derives almost entirely from inherited funds.


Bank Accounts in Name of Pursuer Alone

[81]      These had balances totalling £20,091 at the relevant date.


Pursuer’s Army pension

[82]      The agreed value of the portion of the pursuer’s Army pension attributable to the parties’ marriage is £248,608.


Bank Accounts in Name of Defender Alone

[83]      It is agreed that these had balances totalling £12,997.


Defender’s Hargreaves Lansdown ISA and SIPP

[84]      These had a total value of £43,694.  The pursuer says that these derive substantially from contributions made from his non-matrimonial property.  The defender says that she held a pension with Norwich Union before marriage, and that she transferred it in full to the Hargreaves Lansdown SIPP.  This matter is the subject of a report and vouching in 7/95.  The relevant date value of the SIPP was £30,331.  On the basis of Ms Terras’ report, which the pursuer did not criticise, the portion not to be attributed to the marriage is £11,127. 


MC Ltd

[85]      In 2013 the pursuer set up a consultancy, MC Ltd, when he worked as a contractor for Bank X in 2013/14.  He held 51 shares in the company, and the defender the remainder.  The balance in the bank account of MC Ltd was £16,853.33 at the relevant date.  Most of that sum was used to pay sums due to HMRC and a recurring direct debit payment to meet a liability of the company.  The pursuer himself took £2,703.21 by way of salary which he says covered the months July to November 2014.  He took also repayment of a director’s loan of £200 and payment of expenses of £633.91.

[86]      I accept the pursuer’s evidence that his consulting work had ended by the relevant date, and that the balance in the company’s account at the relevant date has been used to meet debts incurred by the company before the relevant date.   


Firm of A

[87]      This is the firm referred to above in relation to the commercial property in Morningside.  The balance of the firm’s bank account at the relevant date was £3,947.  It is not disputed that since the relevant date the defender has operated the firm’s bank account alone.  Although in his pleadings the pursuer calls on the defender to account for her intromissions, he does not insist on that.  The rental income has formed part of the income available to the defender since separation, and was taken into account as such in determining how much interim aliment the pursuer required to pay at an earlier stage in this action.


Mercedes Car

[88]      It is not disputed that the relevant date value of the car was £16,000, or that the defender has had sole use of it since the relevant date.  The pursuer contends that it should be valued as at the relevant date, and the defender that account should instead be taken of its current value, which is £10,440.   Although this is a depreciating asset, in my view account should be taken of the circumstance that the defender has benefited from the sole use of it since separation.  It is therefore appropriate to have regard to its value at the relevant date when taking its transfer into account in assessing what represents a fair sharing of the matrimonial property.


Pursuer’s Army Reserve Pension

[89]      Parties agree that no value falls to be attributed to the pursuer’s Army Reserve Pension.


Loan to Mrs A’s Estate by Pursuer

[90]      The defender argues that the pursuer paid fees and outlays in connection with Mrs A’s estate and that that debt to him should be treated as an item of matrimonial property.  6/79, the account of receipts and payments relative to her estate, discloses that this was reimbursed to the pursuer, but not when that was done.  The loan was made on 9 June 2014.  I do not know, on the evidence, whether or not the loan was outstanding at the relevant date.   I leave it out of account.


Defender’s Additional State Pension

[91]      This has an agreed value of £7,250.



[92]      Section  8(2) of the Family Law (Scotland) Act 1985, provides that the court is to make such order for financial provision, if any, as is

“(a) justified by the principles set out in section 9 …; and

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


[93]      Section 9 is, so far as material to the present action, in the following terms:

“9(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 …

(b) fair account should be taken of any economic advantage derived by either person from contributions by the other, and of any economic disadvantage suffered by either person in the interests of the other person  or of the family;

(c) any economic burden of caring, should be shared fairly between the persons–

(i) after divorce, for a child of the marriage under the age of 16 years;

(d) a person who has been dependent to a substantial degree on the financial support of the other person should be awarded such financial provision as is reasonable to enable him to adjust, over a period of not more than three years from–

(i) the date of the decree of divorce, to the loss of that support on divorce;

(e) a person who at the time of the divorce … seems likely to suffer serious financial hardship as a result of the divorce …  should be awarded such financial provision as is reasonable to relieve him of hardship over a reasonable period.


(2) In subsection (1)(b) above and section 11(2) of this Act—

‘economic advantage’ means advantage gained whether before or during the marriage …  and includes gains in capital, in income and in earning capacity , and ‘economic disadvantage’ shall be construed accordingly;

‘contributions’ means contributions made whether before or during the marriage …; and includes indirect and non-financial contributions and, in particular, any such contribution made by looking after the family home or caring for the family.”


[94]      Section 10, again so far as material, provides:

“10(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 persons  when it is shared equally or in such other proportions as are justified by special circumstances.

(2) Subject to subsection (3A) below, the  net value of the property shall be the value of the property at the relevant date after deduction of any debts incurred by one or both of the parties to the marriage …

(a) before the marriage so far as they relate to the matrimonial property …, and

(b) during the marriage … ,,

which are outstanding at that date.

(4) Subject to subsections (5) and (5A) below, in this section and in section 11 of this Act ‘the matrimonial property’ means all the property belonging to the parties or either of them at the relevant date which was acquired by them or him (otherwise than by way of gift or succession from a third party)—

(a) before the marriage for use by them as a family home or as furniture or plenishings for such home; or

(b) during the marriage but before the relevant date.

(5) The proportion of any rights or interests of either person —

(a) under a life policy or similar arrangement; and

(b) in any benefits under a pension arrangement

 which either person has or may have (including such benefits payable in respect of the death of either person which is referable to the period to which subsection (4)(b) … above refers shall be taken to form part of the matrimonial property …

(6) In subsection (1) above ‘special circumstances’, without prejudice to the generality of the words, may include —


(b) the source of the funds or assets used to acquire any of the matrimonial property … where those funds or assets were not derived from the income or efforts of the persons  during the marriage … ;


(d) the nature of the family property … , the use made of it (including use for business purposes or as a family home) and the extent to which it is reasonable to expect it to be realised or divided or used as security;”


[95]      Section 11(2) makes further provision in relation to section 9(1)(b)

“11(2) For the purposes of section 9(1)(b) of this Act, the court shall have regard to the extent to which—

(a) the economic advantages or disadvantages sustained by either person have been balanced by the economic advantages or disadvantages sustained by the other person, and

(b) any resulting imbalance has been or will be corrected by a sharing of the value of the matrimonial property …  or otherwise.”


[96]      The exercise for the court is one of discretion, aimed at achieving a fair and practicable result:  Little v Little 1990 SLT 785, Lord President (Hope) at pages 786L-787C.  It is for the court of first instance in each case to determine whether an event specified in section 10(6) constitutes special circumstances in the case in question, and if so whether it justifies a division in proportions other than equal.  It is not the case that whenever special circumstances are found to exist there must be an unequal division:  Jacques v Jacques 1997 SC (HL) 20, Lord Jauncey of Tullichettle at page 22; Lord Clyde at page 24.


Unequal Sharing

[97]      I was referred in submission to Davidson v Davidson 1994 SLT 506;  R v R 2000 Fam LR 43;  Cunningham v Cunningham 2001 Fam LR 12;  Sweeney v Sweeney 2002 Fam LR 126;  Campbell v Campbell 2008 Fam LR 115;  Harris v Harris 2013 Fam LR 122;  EP or G v GG 2016 Fam LR 30.   The defender also relied on certain observations in Harley v Thompson 2015 Fam LR 45 and Gow v Grant 2013 SC (UKSC) 1, cases concerning the application of section 28 of the Family Law (Scotland) Act 2006 in seeking to dissuade me from carrying out a tracing exercise regarding the source of funds, particularly in relation to the matrimonial home.

[98]      In principle the whole of an asset may be excluded from sharing on the basis of the source of the funds used to acquire it: Sweeney v Sweeney 2002 Fam LR 126, Lord Kingarth, obiter, at paragraph 17.

[99]      The marriage in Davidson had lasted only three years.  The matrimonial property, a farm, was worth £177,000.  The source of funds for its purchase had been the wife’s substantial, inherited shareholdings.  The husband was unwell and had a very restricted earning capacity.  Lord Maclean took into account that the husband had benefited from £11,500 contributed to him by the wife.  The wife had care of the children of the marriage and was responsible for their upbringing.  He considered that the husband would suffer serious financial hardship as a result of the divorce.  The court ordered payment to the husband of a capital sum of £60,000 (just over 33% of the matrimonial property.

[100]    R concerned a marriage that had lasted for 10 years.   The net value of the matrimonial property derived to a large extent from assets donated to or inherited by the husband.  Having taken into account economic disadvantage to the wife in respect of her inability to pursue independent economic activity because of her care for a child.  Lord Eassie apportioned £380,000 of a total value of £1,204,635 to the wife (31.5%).

[101]    In Cunningham Lord Macfadyen declined to divide the value of a matrimonial home unequally, notwithstanding the contribution of £100,000 by the defender to its purchase price from inherited capital.  He wrote, at paragraph 25,

“Money used to purchase the matrimonial home is, in my view, devoted in a particularly clear way to matrimonial purposes, and the source of the funds so used is in my view less important than it would be in the case of other types of matrimonial property.”


[102]    Campbell related to a marriage which lasted for 16 years.   At the start of the marriage the husband had £1,435,000 in assets.    Among those assets was a pharmacy business which, during the marriage, was sold for a little less than £3,000,000, after tax, of which £2,450,000 was then invested in matrimonial property.  Lord Carloway determined that the wife should receive £960,000 of the total property – a proportion of roughly 26.5%.

[103]    Harris is notable not for the particular division of matrimonial property, but for Sheriff Morrison’s 12 point analysis at paragraph 33.

[104]    In EP or G the parties were married for seven years and four months.  The purchase price of the matrimonial home was £560,000.  The husband contributed £133,000.  The wife contributed £80,000 which was applied in capital improvements.  The husband discharged the mortgage during the marriage, significantly by applying £450,000 from a commuted pension lump sum.  Lady Wolffe rejected the contention that in Cunningham Lord Macfadyen had laid down a general rule according a particular status to the matrimonial home or such as to render it less susceptible than other assets to a special circumstances argument.  She rejected also an argument that the circumstance that title had been taken in equal shares would be highly suggestive of equal sharing.  She apportioned £205,000 of the agreed value at proof of £717,500 to the wife (around 29%).

[105]    The circumstance that title is taken in equal shares is just one of the circumstances that falls to be weighed in determining what will constitute a fair sharing.  There is no suggestion in this case that it reflected any express agreement between the parties as to how property should be divided on dissolution of the marriage.  In relation to that matter I consider that the analysis by Lady Wolffe at paragraph 74 of EP or G is correct in law, as was her rejection of the argument based on Cunningham.  While the use of a property as a matrimonial home may be a special circumstance for the purposes of [section 10], the matrimonial home is not, as a matter of principle, less susceptible to unequal sharing. 

[106]    The authorities cited by the defender which derive from cohabitation cases are of limited assistance where the argument is about the source of funds, rather than economic advantage or disadvantage.  The object of the statutory regime provided in section 28 of the Family Law (Scotland) Act 2006, as the Supreme Court observed, is fairness in the assessment of compensation for contributions made or economic disadvantages suffered in the interests of the relationship.  It is no doubt true of marriage, as of cohabitation, that in most cases it is quite impracticable to work out who has paid for what and who has enjoyed what benefits in kind during the cohabitation, and that people do not keep running accounts in respect of these matters. 

[107]    I can also accept that in cases of divorce, as in those of cohabitation, a line by line examination of parties’ bank statements in order to see who paid for each item of expenditure is likely to be disproportionate and unlikely to assist in achieving justice between the parties.  There is scope for a broadly common approach to section 28 and to section 9(1)(b).

[108]    While observing that the task of the court under each statutory regime is to achieve fairness between the parties, the Supreme Court expressly noted that section 28 of the 2006 Act does not seek to replicate the arrangements that are available for financial provision on divorce or the termination of a civil partnership. 

“For this reason it would not be right to adopt the same approach to the application of that section as would be appropriate if the exercise was being conducted under section 9 of the 1985 Act. The starting points of principle are significantly different.”


[109]    In this case there are discrete and substantial capital payments from the pre‑matrimonial property of the pursuer.  It is entirely practical to ascertain, and indeed obvious, where the funds for the purchase of the matrimonial home came from.  As Sheriff Morrison pointed out in Harris, at paragraph 38, arguments about economic advantage are less clear cut, more problematic, and more difficult to quantify than arguments about the use of inherited wealth to purchase property.  Detailed tracing exercises in relation to economic advantage arguments are unlikely to be productive.

[110]    Although in a number of the cases discussed above the division has been roughly in proportions of 66%/33%, there is no easily discernible basis in them, in arithmetic or principle, for that apportionment, and I do not regard the circumstance that the division has fallen out that way in those cases as of any particular significance, or as something that affords me guidance as to how the property should be divided in this case.  The exercise for the court is one of discretion in every case taking into account a variety of factors that will be different in every case.


Items Held or Retained by Defender at Relevant Date 

[111]    As at the date of separation the defender held the following items of matrimonial property.  She had the four bank accounts detailed in table 1, which had at the relevant date balances totalling £12,907.  She had a Hargreaves Lansdown SIPP worth £19,204, and a Hargreaves Lansdown ISA worth £24,409.  The only other item of matrimonial property in her name is her state pension, which has a value of £7,250.  I take into account also the Mercedes motor car, and £8,000 from the parties’ joint account. 


Orders for Financial Provision

[112]    It is clear that by far the greater proportion of the matrimonial home was acquired using the pursuer’s funds which derived from his own, non-matrimonial property, or wealth gifted to or inherited by him.  He made substantial contributions to the other two items of heritable property.

[113]    The pursuer submits, in essence, that the orders he proposes will represent a fair sharing of the matrimonial property overall.  Using current values for the heritage and relevant date values for the remainder of the property (but making no allowances for marketing or conveyancing costs) he calculates that by making the orders he proposes and no others, the defender would retain or receive £400,074, of which £296,050 would be one‑third of the net free proceeds from the heritage.  That would represent 27.25% of the matrimonial property overall.  Substituting for the current values the relevant date values, according to my calculation she would, on the basis he proposes, receive 26.49% of the matrimonial property.

[114]    I am not satisfied that what the pursuer proposes represents a fair sharing of the matrimonial property.  In particular it does not result in a sharing that meets the needs of the defender.  I am not satisfied that what the defender proposes represents a fair sharing of the matrimonial property either.  It would result in an allocation of property to the defender that is excessive having regard to the extent of the pursuer’s contribution from non-matrimonial property, and the extent to which the net value of the heritable properties at the relevant date derived from those contributions.

[115]    Separately, I am not satisfied that it would be practicable in the circumstances of this case to make orders for transfer of property of the sort sought by the defender.  The defender gave evidence that she had sought lending which would allow her to discharge the pursuer’s share of the lending in respect of the commercial property and the flat.  She produced offers of loan 7/386 and 7/387.  What was very unclear from her oral evidence, however, was just what information the prospective lenders had about her financial situation.  It was not clear whether the lenders understood that when she came to borrow, she would not be doing so as the co-proprietor of the matrimonial home, a property with substantial equity in it. 

[116]    I am satisfied that the matrimonial property should be shared unequally, to take fair account of the contributions made by the pursuer from his own funds to the heritable property acquired during the marriage.

[117]    In my view, the following orders are required in order to achieve fair sharing of the net value of the matrimonial property.  

(a)        The three items of heritable property should be sold, and the net free proceeds divided in proportions of one third to the defender and two thirds to the pursuer

(b)        The value of the pursuer’s pension at the relevant date should be divided equally between the parties, and to that end I award a capital sum of £124,304 to be paid by the pursuer to the defender.

(c)        The contents of the matrimonial home and the flat should be divided equally between the parties according to value.

(d)       The Mercedes motor car should be transferred to the defender.

(e)        The defender should retain as her own property the funds held by the firm of A  in the TSB bank account no ****9203 as from the date of sale of the heritage being the commercial premises in Morningside, Edinburgh.

[118]    It is not possible to predict with certainty what the proceeds of the sale of the heritable properties will be.  At the relevant date one third of their net value was £267,028.  Adding to that the capital sum just mentioned, half of the value of the contents of the heritage, what the defender held at the relevant date, and the value of the Mercedes car at the relevant date produces an overall figure of £477,773.

[119]    By way of cross‑check, carrying out the same exercise at current values produces a figure of £506,794, of which one third of the net values of the heritage accounts for £296,049.  That will not equate to the net free proceeds, as there will be costs of marketing and conveyancing about which I have no information, and the actual prices for which the heritable property will be disposed of are of course at this stage not known.  For the purposes of determining what other assistance the defender may require in order to adjust to the loss of support on divorce it is relevant to note, however, that it is more likely than not that she will, taking into account the proceeds of sale and the capital sum, come to have at her disposal in the relatively near future, capital of not less than £400,000.

[120]    I heard various contentions as to what accommodation might be required by the defender and S.  The pursuer at one stage suggested that Comiston Place would provide suitable accommodation.  The defender disputed that, citing the need for more extensive accommodation for S, his family pets, for space in which she could work to develop her business and to allow S to invite friends home.   She seemed to be concerned that S might be embarrassed in doing so were accommodation not located in certain particular areas of Edinburgh.    I accepted the defender’s evidence that Comiston Place was currently subject to a buy to let mortgage.  She would require to obtain fresh lending on a different basis to reside in the property.  She would not be able to do so, given her income.  She would also lose the income she currently has from the rental. 

[121]    The defender produced advertisements for properties which she said would be suitable (7/379).  These were all flats with 1‑2 public rooms and 3‑4 bedrooms in very desirable areas of Edinburgh.  The “offers over” sums ranged from £435,000 to £515,000.  She said her father would assist her by lending her some further funds for the purchase.

[122]    It is not appropriate for me to adjudicate in detail on precisely what accommodation the defender needs.  I am not satisfied that she reasonably requires properties as extensive as those for which she produced advertisements, or in the particular locations advertised.  I am satisfied that the provision of a fund in the range of £400,000 will be adequate for the acquisition of a property in Edinburgh that will represent suitable accommodation for her and S, who can reasonably be expected to reside with her for at least the next three years.  I do not accept that she needs to provide accommodation for M, who is an adult, and in employment.

[123]    It is against that background that I consider the question of periodical allowance.  There are a number of imponderables, in particular the timing of the sale of the various properties.  Until the matrimonial home is sold there will be running expenses associated with it.  Until the properties at Jeffrey Street and Morningside are sold, there will be costs associated with them, but those can be set off against the rental income.  I have not been asked to regulate who should receive the net income from those properties during the period until their sale in the event that I were to order their sale.  The defender, in her affidavit, at paragraph 11, refers to advice from Savills and Simpson and Marwick to the effect that it may take six months or more to sell the matrimonial home.

[124]    The defender approaches the development of her business with a spirit of enterprise and optimism.  It is difficult to predict when it will become profitable and in particular when it may become profitable to such an extent as materially to increase the funds available to her for expenditure. 

[125]    Both parties relied on statements of their income and outgoings produced for an interim aliment motion in September 2016.  Part of the defender’s statement concerns some expenses associated with setting up her business.  I accept that there are expenses legitimately associated with her business.  They will in due course be set off against the turnover of the business for the purposes of calculating profit and any liability to tax.  That the defender needs to incur some costs in setting up a business with a view to providing herself with income is part of what I require to take into account in looking at financial provision overall, and I consider that given the relatively modest figures included in the statement, there is no reason that any further set up costs should they arise cannot be met out of the capital with which the other orders will provide the defender.  There is no indication that the figures in the statement are regular monthly outgoings.  I have left out of account both what she has listed as income from her business – which on the basis of her oral evidence appears to be turnover rather than profit.  In any event, if she derives profit from her business, deductions will be made from the monthly payment she receives from her health protection insurance, with the result that she will not for some time be better off by reason of her business.

[126]    The September 2016 figures identify a shortfall in income of £1,693.85, which, as I understand it, underlies the submission that, even if the incomes from Jeffrey Street and Morningside were to remain with the defender, she would require a periodical allowance of £1,700 per month.  Those figures include income and expenditure related to the defender’s business, which, as I have outlined above, should be left out of account.  They include outgoings associated with the rental properties other than Comiston Place, and the cost of running the matrimonial home.  

[127]    The pursuer recognises that a period of adjustment will be required, and submits that I should award £1,000 for six months and £500 for a further six months.

[128]    Aside from the cost of food, the defender provides figures, which on their face are not unreasonable, associated with the upkeep of S, of £295.  The running costs of the matrimonial home are said to be £898.07, exclusive of mortgage.  Motoring expenses are said to be £356.73 and personal expenses £488.44.

[129]    Under the heading of miscellaneous, there is a monthly figure of £736, of which £300 is described simply as “miscellaneous”—presumably to allow for unexpected items of expenditure.  The food bill, which the pursuer criticises as extravagant, is £850 a month.  A figure for £210.39 for supplements is included, which was not criticised.  It is not clear whether this is a bill including provision for M, as well as the defender and S.  It is on its face relatively generous if it is indeed for two people, one of whom receives ten meals during the week at his school.  The use of supplements is, I accept, something that the defender finds of assistance to her in managing her condition. 

[130]    Simply adding up all of these figures produces a total of £3,834.63.

[131]    Once the various properties have been sold, the defender will have no income from them.  Her income will be £602.38 for the rental of the Comiston Place property, less management fee and mortgage payment, £916.74 from Scottish Provident, £82.80 Child Benefit and £292.61 in Child Maintenance, producing a total of £1,894.53. 

[132]    It is not easy to predict with accuracy her outgoings.  I accept that the defender can probably reduce her outgoings to some extent as she adjusts to her situation after divorce, and that a smaller house should have running costs, including utility bills, at a lower level.  She requires to provide food and accommodation for S.  S is at school from 0815h until 1800h (and sometimes until 2100h) five days each week, and on Saturday mornings.  He takes lunch and dinner at school on five days each week, the cost of which is covered by the fees paid by the pursuer.

[133]    Allowing, on a fairly broad basis, for some reduction in expenditure on personal, miscellaneous and grocery expenses, and stripping out a proportion of the household running costs to allow for the upkeep of a smaller property, it is difficult to see that her outgoings will be much less than around £3,100 per month.  This produces a shortfall of about £1,200 per month.   

[134]    The pursuer’s income and outgoings as at September 2016 are detailed in 6/3.  His total monthly net income is £7,068, made up of £4,341 in salary, an Army pension of £752, Army reserve pay of £200, investment income of £775 and a contribution of £1,000 from his partner.  His outgoings are said to be £7,734.63, producing a deficit of £666.63.  He rents a four‑bedroomed flat at a cost of £2,300 per month, which he shares with his partner.  He pays £2,000 each month in school fees for S.   His CMS payment is listed as £342, although that figure is, I understand, now out of date.  Among his outgoings is the monthly mortgage payment of £320 for the matrimonial home.  He has received further, very substantial, capital since the relevant date.   The pursuer has undertaken to continue to pay the mortgage until sale.

[135]    I consider that in order to allow the defender to adjust to the loss of financial support from the pursuer, she will require a periodical payment of £1,500 per month for a period of 6 months, and £1,200 for a further period of 12 months.   The figures are necessarily assessed on a fairly broad basis, having regard to the imponderable factors mentioned above.     I am satisfied that the defender has been dependent to a substantial degree on the financial support of the pursuer.    This has been particularly so in recent years, as she has not worked in a remunerative capacity for some time, and because her business is at an early stage of development.     I have made the award of periodical allowance under reference to section 9(1)(d).   I am satisfied, looking to section 9(1)(e) that no hardship of the sort contemplated by that provision will result from divorce if I make the orders I have already described.


Other Orders

[136]    There is a passage in the pursuer’s affidavit detailing the difficulties that he has experienced in gaining access to the matrimonial home.  When he gave oral evidence he was not seriously challenged as to the factual accuracy of what he said about this in the affidavit.  The defender did not ask me to grant the order for interdict for which she concluded in her defences.  In these circumstances I grant the order sought in the pursuer’s fourth conclusion.