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Family Law

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22 SEP 2014

AB v CB [2014] EWHC 2998 (Fam)

AB v CB [2014] EWHC 2998 (Fam)
(Family Court, Mostyn J, 25 June 2014)

[The judicially approved judgment and accompanying headnote has now published in Family Law Reports [2015] 2 FLR 25]

Financial remedies – Property – Family farmhouse held in trust – Husband and wife occupied property during marriage – Refurbishments carried out – Wife’s entitled to share of the farmhouse upon divorce

The wife was entitled to an outright transfer of £30,500 from the husband and a sum of £134,000 on a life tenancy basis in respect of the matrimonial home which was held in a family trust.

Please see attached file below for the full judgment.

The husband and wife were married for approximately 10 years and had two adopted children. When they met the wife owned one property and she had subsequently purchased a further property. The husband owned a plot of land worth £38,000 and he had income including welfare benefits of £3000 per month. However, the husband’s family had considerable wealth and owned a farm in Pembrokeshire.

During the marriage the husband and wife lived on the farm. Initially they lived in a derelict cottage which was gifted to them by the husband’s parents. They refurbished the property which was eventually sold and the profits were divided amongst the family. Thereafter they moved to the farmhouse which also needed improvements. The husband and wife spent £21,000 from the proceeds of the cottage and the wife spent £5,000 of her personal resources on those improvements. It was now worth £325,000.

While the husband and wife were living in the farmhouse a trust was established in relation to it. The wife claimed she only found out about the trust after the marriage broke down. The principal beneficiary under the trust was the husband and he was permitted to occupy the property as long as he wished as long as he undertook financial responsibility for maintaining it. If he ceased to occupy the property it would revert to the estate.

The judge found that the wife was not shown the trust deed prior to its execution or during the marriage. However, she was aware that the property was not owned by her and her husband and that it was intended that it would remain in the family. After the trust was set up the couple spent a further £15,000 on a loft conversion.

When the marriage broke down the wife went to live with her parents and the husband had now formed a new relationship and was living in another property on the farm. The wife applied for financial remedy following divorce alleging that the trust was a variable nuptial settlement.

There was no doubt that the fundamental question of whether the trust was an arrangement which made some form of continuing provision for both or either of the parties to a marriage was satisfied. The clause of the trust which gave the trustees power to advance all of the property to the husband during his lifetime made it clear that the settlement as a whole was to be regarded as a variable nuptial settlement. Although the intention of the trust was for the property to remain available as a farm asset, it was also the matrimonial home for 7 years.

The wife was entitled to recover from the trust £18,000 as her share of the investments made jointly by the husband and wife plus the £5,000 of her own resources she invested. In addition she was entitled to £7,500 which was half of the amount the couple lent to the family company.

Justice in the case entitled the wife to a share of the farmhouse on a life tenancy basis. Taking into account her outright award from the husband she was entitled to £134,000 on a life tenancy. In consideration of the wife’s relationship with a new partner, that award was sufficient to meet her needs.
The trustees’ application for permission to appeal was refused.
Case No: FD12D04963
Neutral Citation Number: [2014] EWHC 2998 (Fam)

IN THE FAMILY COURT
Swansea Civil and Family Justice Centre
Caravella House
Quay West
Quay Parade
Swansea
SA1 1SP

25 June 2014

BEFORE:

THE HONOURABLE MR JUSTICE MOSTYN

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BETWEEN:

AB
Applicant

- and -

CB (First Respondent)
Trustees of the X Trust (Second Respondent)

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The Transcription Agency, 24-28 High Street, Hythe, Kent, CT21 5AT Tel: 01303 230038

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AB, Litigant-in-person
Richard Anelay QC on behalf of the First Respondent
Richard Dew on behalf of the Second Respondent (Interveners)

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JUDGMENT

AB v CB [2014] EWHC 2998 (Fam)

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