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Case study 1 Divorce – Financial provision – Ancillary relief – Origin of family assets – Personal injury award – Husband receiving damages for personal injury prior to meeting wife – Husband investing compensation in purchase of bungalow and flat to be rented out – Bungalow being adapted to meet husband’s special needs – Wife investing money in bungalow – Couple having two children before divorcing – Wife acting as primary carer – Husband resisting wife’s claim for ancillary relief due to desire to retain bungalow – District judge awarding wife lump sum – Circuit judge dismissing appeal – Husband appealing to Court of Appeal – Whether judge erring in treatment of assets derived from personal injury award. Held – In the instant case, the district judge had correctly noted that the fact that the capital came by way of compensation did not exclude it from the court’s consideration. However, she had omitted to apply an important qualification, namely that each case had to be looked at on its facts; in many instances the application of the general sharing rule had to be tempered to reflect the particular needs of the recipient and the very nature of the acquisition of the capital, namely by way of compensation for personal injuries. The appellate court was thus entitled to investigate and to exercise its own discretion in relation to the questions of whether the award was sustainable in the face of the misdirection as to law, and whether the district judge had been right to refuse the husband’s application for a charge back. The district judge had gone into the respective needs of the parties with considerable care. She had come to the conclusion that £285,000 was the minimum required to meet the needs of the wife and children, whose needs were primary, and that the husband’s needs could be met by the sum which she calculated would be left to him. £285,000 might have been on the high side, but it would be unprincipled were the appellate court to interfere. Having heard no oral evidence, such interference would not show proper respect for the function of the trial judge. On the second question, however, the husband’s case was overwhelmingly made good. The need to give special reflection to the origin of the family capital and the special purposes for which it was provided could be properly reflected in converting the order into a Mesher order. The rationality of that was obvious. There was a fixed amount of capital within the family. For the immediate future the wife’s need for a substantial share rested upon her function as the primary carer required to provide the primary home. That need had a reasonably obvious termination on the majority or the conclusion of tertiary education for the twins. It would be just at that stage, when the wife had achieved the task upon which her needs rested, that the husband’s need for return of capital would be likely to be augmented by the ordinary process of ageing, which in turn would be likely to accentuate his disabilities. The exceptional factor in the instant case, namely the origin of the family capital or the vast majority of the family capital, made it particularly suitable for the application of a Mesher order. The extent of the husband’s reversionary interest, or residual interest, would, accordingly, be quantified at one third of the capital awarded to the wife, but particularly expressed in the bricks and mortar in which the money was invested. The essential intention was that the property to be acquired by the wife in an assumed purchase of approximately £285,000 would be charged as to one third of its equity in favour of the husband, that charge to be redeemed when the twins achieved maturity (see –, below); Wagstaff v Wagstaff  1 FCR 305 considered. Case study 2 Divorce – Financial provision – Ancillary relief – Treatment of assets – Lottery prize – Colombian nationals marrying in Colombia and having two children – Family moving to England – Wife entering syndicate agreement for lottery and winning £500,000 – Wife purchasing property in sole name – Family moving to property before breakdown of marriage – Wife obtaining divorce in Colombia – Husband seeking financial relief in England after overseas divorce – Treatment to be accorded to lottery win – Matrimonial and Family Proceedings Act 1984, ss 12, 13. Held – Although treatment of a lottery prize was obviously highly fact-specific, there had to be some general principles capable of being stated in relation to the phenomenon. If the parties were in effect operating a syndicate, whether formal or informal, where both were aware that tickets were being bought and where both had agreed tacitly or expressly to their purchase, then it was easy to see the prize as a joint venture and therefore as matrimonial property, normally to be equally shared. On the other hand, if one party was unilaterally buying tickets, from his or her own earned income, without the knowledge of the other party, then it was equally easy to see the prize as a receipt by that party alone akin to an external donation, and therefore as non-matrimonial property. That case would be fortified if the party in question was buying the ticket as part of a syndicate with others, and more so if the marriage had become troubled and unhappy with the parties drifting into separate lives socially and economically. The instant case clearly fell into the second scenario. Although the wife’s case that the parties had been de facto separated from 1996 was false, the marriage had been bitterly unhappy from around the mid-1990s, if not earlier. On the evidence, her capital comprised 108 A Road and the monies transferred to MR; her assertion that those transfers had been in discharge of debts had to be rejected. In calculating the appropriate award, the first port of call was to apply the needs principle. The husband’s present income and housing needs were met, but he had an urgent need to make provision for his old age. A Duxbury calculation on £11,250 per annum for a 65-year-old gave a capital requirement of approximately £82,000 when allowance was made for a full state pension; the husband accordingly had a need for a lump sum to be paid now of £82,000. By downsizing her home at the point of retirement, the wife and her new husband would have ample funds to provide for their old age. It was then necessary to turn to the application of the sharing principle. In the circumstances, the initial receipt of the lottery prize was non-matrimonial property. However, upon purchasing 108 A Road the wife had converted that part of her non-matrimonial assets into matrimonial property. Given that the source of that matrimonial property was not joint endeavour but rather the wife’s non-matrimonial property, and given the relatively short period that the husband had actually lived in 108 A Road, he was not entitled to an equal sharing of it, or anything resembling such; a sharing of 15%–20% would be fair. The value of the property after costs of sale (but ignoring the mortgage) was £480,150. Application of the sharing principle gave a range of award to the husband of £72,000–£96,000. Standing back and weighing together the application of both the sharing and needs principles, a lump sum award of £85,000 was the right result. It would be paid in 28 days and would be on the clean break basis. The compensation principle was not applicable (see , , –, , –, below).