Scottish Sheriff Court Decisions
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Cite as: [2007] ScotSC 13
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You are here: BAILII >> Databases >> Scottish Sheriff Court Decisions >> Deptford v. Simpson [2007] ScotSC 13 (11 April 2007) URL: http://www.bailii.org/scot/cases/ScotSC/2007/13.html Cite as: [2007] ScotSC 13 |
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F83/05.
Sheriffdom of Grampian,
JUDGMENT OF
SHERIFF DOUGLAS J. CUSINE
in
causa
Mrs Julie Deptford or Simpson,
residing at Shepherds Cottage,
East Ranchie Farm, Tain, Ross-shire.
PURSUER
Against
George Alexander Hendry Simpson,
residing at
DEFENDER.
The Sheriff having resumed
consideration of the whole cause finds the following facts to be agreed or
proved:-
1. The pursuer is Mrs Julie Deptford or
Simpson, residing at Shepherds Cottage,
East Ranchie Farm, Tain, Ross-shire. She is 43 years of age. The defender
is George Alexander Hendry Simpson, residing at
2. The parties lived together from the
date of the marriage until they separated on
3. In 1992, the pursuer had a business
which was training and showing dogs, and acting as a judge at dog shows. At that time, the defender tenanted a small
farm, Yonder Bognie, Forgue, Huntly.
4. Between 1992 and the date of
separation, the parties pooled their financial resources and both contributed equally
to the improvement of both businesses.
The pursuer helped on the farm when the defender was away from the farm,
for example, by sheering sheep. The
defender looked after the pursuer's dog business when she was away, for
example, judging at dog shows. The
pursuer operated a dollar account for visits abroad, but there is no
information about any outstanding debit or credit balance.
5. During the marriage, the pursuer
received £200 per month from the defender for the household which, initially,
included a child of the defender. The
cost of the pursuer's motor car and its maintenance were business outlays. She did not receive any other payment.
6. At the time of the marriage, the
parties' assets were broadly similar in value.
The pursuer had her dog business and a divorce settlement from a
previous marriage, amounting to £22,500, which she had received in 1994. The defender had the farm.
7. Although the parties contributed to
each of the businesses, the accounts were kept separate because the farm was a
partnership and a limited partner (not the pursuer) was entitled to a share of
the profits.
8. The pursuer used the money from her
divorce settlement to purchase sheep and lambs for the farm.
9. In 1999, the pursuer gave the defender
a loan of £37,000 which represented the value of sheep and lambs which the
pursuer had purchased. That loan, which appears
in the accounts for the farm from 1999 onwards, has not been repaid.
10. In 1999, the defender took the tenancy of
a farm called
11. In early 2000, the defender received a
one-half share of his mother's estate amounting to £26,427.13. He used that to buy cattle for the farm. These cattle were fattened and sold and more
cattle were bought with the proceeds and sold. However, the farm was not suited to the
rearing of cattle and when the second lot was sold, the proceeds were invested
in sheep and lambs.
12. For some time, the defender has undertaken
sheep-shearing which brings in approximately £20,000 per year.
13. In the accounts for Yonder Bognie for the
year to
14. In the accounts for
15. In the business account for
16. When the pursuer left the matrimonial
home, she instructed Dingwall and Highland Marts Limited to carry out a
valuation of the sheep, stock, machinery, stores etc. belonging to the farm as
at
17. The valuation which was carried out on
18. The pursuer was not permitted access to
the firm's accounting records after November 2003.
19. The flock records for the farm disclose
that on
20. At that time, fat lambs were selling at
£45 each and so a sale of 264 such lambs would have produced £11,880. In the valuation by Dingwall and
21. The defender's bank account shows a
credit to the account on
22. When the pursuer left the matrimonial
home, she took her personal belongings, a suite, and her dog business. There is no information about the value of
the suite or of her personal belongings, but the business was worth £21,906 She set up another business, but she had to borrow money to
fund it. She used the interim payment from the defender to pay off part of the
loan.
23. At the date of separation, the balance at
credit of the bank account was £21,036.42.
At that date, the pursuer had an insurance policy valued at £3,198.99
and the defender had one valued at £1,433.87.
The pursuer's dogs were worth £1500 and those of the defender £4250.
24. From the date of the marriage onwards,
the farm business attracted a government subsidy known as sheep quota. The sheep quota was based on the number of
sheep owned by a farmer.
25. The
sheep quota appears in the balance sheet for the Yonder Bognie farm as at
26. In the business account for the period
from
27. By
2004, farmers knew that the sheep quota would be replaced by a Single Farm
Payment which is based on the number of hectares held by a farmer.
28. The Single Farm Payment was created by a
European Community Directive of 2003, but it did not come into force in the
29. The entitlement to Single Farm Payment
was based on the average number of hectares held by a farmer for the years
2000, 2001 and 2002.
30. The introduction of Single Farm Payment
had an adverse effect on the value of sheep quota. Sheep quota did not continue in existence
after Single Farm Payment came into effect.
31. The Single Farm Payment was not tradable
at the date of separation but since January 2005 it has been tradable at
between 2.2 and 2.5 times its annual value.
The current annual value of the Single Farm Payment for
32.
On
33.
After
leaving the matrimonial home, the pursuer borrowed money to purchase a
business. She used the interim payment from the defender to repay part of the
loan. She has no capital and no subsidy. The defender has sufficient resources
to enable him to make a payment to the pursuer, should she be entitled to one.
Finds in fact and in law:
1. The relevant date for the purposes of
s. 10(3) of the Family Law (
2. At the
relevant date, the parties matrimonial property consisted of the farm at
Kirkland, cash in the bank, the pursuer's business, the pursuer's insurance
policy, the defender's insurance policy, the pursuer's dogs, the defender's
dogs, the proceeds of the sale of sheep and lambs sold after the relevant date,
and the value of the Single Farm Payment, viz:
£29,670.
3.
At the relevant date, the net value of the parties'
matrimonial property was £182,195.76.
The liabilities of the farm at the relevant date were £28,343.
4.
An order for payment by the defender to the pursuer of
a capital sum is justified by the principles set out in section 9(1)(a) and (b)
of the Family Law (
5. There are no special circumstances which
would justify a sharing of the matrimonial
property, other than an equal sharing.
6. At the relevant date, and on her departure
from the matrimonial home, the pursuer took with her assets valued at £25,204.99.
7. The
defender made an interim payment to the pursuer on
THEREFORE SUSTAINS the 3rd
plea-in-law for the pursuer, On pursuer's motion, DISMISSES the pursuer's 2nd and 3rd craves; REPELS the defender's 2nd, 3rd
and 5th pleas-in-law; FINDS
the pursuer entitled to a capital sum of SIXTY-FIVE THOUSAND, EIGHT HUNDRED AND
EIGHTY-TWO POUNDS AND EIGHTY-NINE PENCE (£65,882.89); ORDAINS the defender to pay to the pursuer the sum OF FIFTY THOUSAND
EIGHT HUNDRED AND EIGHTY-TWO POUNDS AND EIGHTY-NINE PENCE, (£50,882.89) being
the capital sum to which she is entitled under deduction of the sum of FIFTEEN
THOUSAND POUNDS (£15,000) paid to account on 19 June, 2006; FINDS the pursuer entitled to interest
on the said sum of SIXTY-FIVE THOUSAND, EIGHT HUNDRED AND EIGHTY-TWO POUNDS AND
EIGHTY-NINE PENCE (£65,882.89) at the rate of eight per centum per annum from 11 February 2005 until 19 June 2006, and
on the said sum of FIFTY THOUSAND EIGHT HUNDRED AND EIGHTY-TWO POUNDS AND
EIGHTY-NINE PENCE, (£50,882.89) at the rate of eight per centum per annum from 20 June 2006 until payment; FINDS the defender liable to the
pursuer in expenses; Allows the pursuer to give in account of same, and remits
the same, when lodged, to the auditor of court to tax and to report.
NOTE
Proof in
this case was heard on 9th January and 26th February,
with submissions on
Submissions for the Pursuer
Mr Wilson
submitted that at the beginning of the marriage, the pursuer and the defender
had assets which were broadly similar in value.
The pursuer had a divorce settlement from a previous marriage and her
modest dog business: the defender had a small farm.
The pursuer
and defender had made similar contributions to the marriage; both had worked
hard and had devoted all their efforts to building up the two businesses. The pursuer had concentrated on her dog business;
the defender on his farming business. As
a result of their combined efforts, both businesses had grown.
The
defender's inheritance from his mother had been put into the business and
assets had been acquired with it, both in the year in which it was received and
in the following year. In each year,
cattle had been bought, but the defender's position, in evidence, was that his
business was not suited to the rearing of cattle and so the cattle had been sold
and replaced with sheep and lambs. In Mr
Wilson's submission, the £26,427.13 received by the defender as an inheritance
should be regarded as matrimonial property, as it had been converted into an
asset of the farm.
Matrimonial
Property
Leaving aside
the issue of Single Farm Payment and the sales of lambs and ewes after the
relevant date, Mr Wilson submitted that the matrimonial property at the
relevant date consisted of the following:
|
1. The stock and other assets of
|
£114,109.20 |
|
2. Cash in the bank |
£ 21,036.42 |
|
3. The pursuer's business,
valued at |
£ 21,906.00 |
|
4. The defender's policy, valued
at |
£ 1,433.87 |
|
5. The pursuer's policy, valued
at |
£ 3,198.99 |
|
6. The defender's dogs, valued
at |
£ 1,500.00 |
|
7. The pursuer's dogs, valued at
|
£ 4,250.00 |
|
Total |
£167,434.48 |
In his
submission, there is no reason why, in terms of the relevant legislation, there
should not be equal sharing between the parties. When the pursuer left the matrimonial home, she
took her dog business with her and she also had her policy. These two items add up to £25,204.99. In June 2006, the pursuer received an interim
payment from the defender of £15,000.
Single Farm
Payment
Mr Wilson
accepted that, at the relevant date, the Single Farm Payment was not
payable. However, legislation dealing
with its entitlement was in place in 2003 and the first payment was based on the
average hectarage of
Pursuer's
Financial Position
In Mr
Wilson's submission, the pursuer had established that after leaving the
matrimonial home, she had borrowed money to buy her business. She had the proceeds of her dog business and had
used the interim payment from the defender to repay part of a loan. She had no capital and no subsidy, whereas the
defender had resources, including the inheritance from his father, from which
he could make a capital payment.
I was
invited to dismiss the pursuer's second and third craves which were not being
insisted upon. I was invited to sustain
the pursuer's third plea-in-law and to grant the pursuer's fifth crave
(expenses). In the event that I made an award in favour of the pursuer, I was
invited to award interest at the judicial rate on the whole sum from the date
of the action until
Defender's submissions
Mr Duffill submitted that the pursuer
travelled abroad and operated a dollar account and that should be taken into
consideration. Furthermore, the
defender's business brought in £20,000 per year for sheep-shearing, something
which the defender continued to do despite the fact that he was well beyond the
retiral age for that activity, that normally being 40.
When the pursuer and defender started
to live together, the pursuer arrived with nothing, but shortly thereafter
received £22,000 by way of a divorce settlement. At the end of the marriage, she took with her
dog business. The value of the sheep
quota at the date of separation was £783, and it was that, and not the Single
Farm Payment, which should be taken into account. So far as Single Farm Payment
is concerned, the defender receives £12,000 in two parts, but the annual
payment is made in December. Mr Duffill
accepted that if that were matrimonial property, that would justify an uneven
distribution.
Looking to the accounts at the date
of separation, these showed stock values as per the valuation carried out by
Dingwall & Highland Marts. The
capital figure was £72,847. The accounts
show a loan of £37,000 which is an asset of the pursuer as well as a debt of
the defender. The capital value of Yonder Bognie at the beginning of the
marriage was £13,000. Mr Duffill had
agreed the value of the defender's policy and that an interim payment had been
made. In any award made to the pursuer, the loan of £37,000 should be taken
into account.
If one started with a total asset
value of £72,000, one should deduct £13,000, being the value of Yonder Bognie at
The pursuer's position is that she
has assets, namely the loan of £37,000, a policy worth £3,198, the value of her
dog business, i.e. £21,000 and her divorce settlement of £22,000. After deduction, the pursuer's assets amount
to £42,000. The defender's assets amount
to £34,000, leaving a difference of £7,000.
So far as Single Farm Payment was
concerned, Mr Duffill's submission was that Tyrrel
was not a case in point in that it dealt with redundancy. The other two cases were not in point either
because they were concerned with tradable assets, whereas the Single Farm
Payment was not tradable at the relevant date.
In his submission, the Single Farm Payment, not being tradable at the
relevant date, is not matrimonial property and accordingly, the pursuer is not
entitled to any share of that. She would
be entitled to a share of the sheep quota, but at the value in the accounts at
date of separation, viz:-
£783. The pursuer, in his submission,
was not entitled to anything other than the value of her loan, namely £37,000,
because she has £7,800 more by way of assets than the defender.
Joint Minute.
The Joint Minute (No. 18 of Process)
agrees the relevant date, the value of the pursuer's policy, the value of the
defender's policy, the amount and date of payment of the interim payment, that
the Single Farm Payment had no tradable value at the relevant date, but has an
annual value of £12,625.55 which is tradable at between 2.2 and 2.5 times its
annual value.
Decision.
I found both the pursuer and the
defender, and their witnesses, to be credible and reliable and the proof was
conducted without apparent acrimony.
The parties began living together in
1992, but were married in 1995. They continued
to live together until they separated in 2004 and it is agreed that the
relevant date is
I prefer the submissions made on
behalf of the pursuer to those made on behalf of the defender, because the
latter were predicated upon the premise that the pursuer brought nothing to the
marriage. However, I accept the evidence that both parties came to the marriage
with assets of approximately the same value.
The pursuer had what was then a modest business of training and showing
dogs and acting as a judge at such shows.
She also had her divorce settlement of £22,500. (No.5/2/2 of Process,
Clause Two). The defender operated a
small farm.
The evidence from both parties was
that while, to some extent, each concentrated on his or her own strength, both
worked together to build up the farm and dog businesses and they both devoted a
lot of time and effort to that. They
decided to pool their resources to that end.
Accordingly, the value of these businesses has the potential to be
regarded as matrimonial property.
The Defender's Inheritance from his
mother.
There is included in the value of the
farm business, the pursuer's divorce settlement from her previous marriage which
she invested in sheep and lambs, and also the defender's inheritance in 2000
from his mother's estate amounting to £26,427.13. (No. 6/5/1 of Process) There was no submission that the divorce
settlement should not be included in the matrimonial property, but it was submitted
that the defender's inheritance from his mother should be excluded. The pursuer's submission in that connection
is noted above and need not be repeated.
For the purposes of Section 10 of the
Family Law (Scotland) Act 1985 which deals with the sharing of matrimonial
property, that term is defined as, "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."
It was not disputed that the defender
put the inheritance money into the farm business and that it was used to buy
cattle in the year that it was received and in the following year, but when it
became apparent that the defender's business was not suited to the rearing of
cattle, the cattle were sold, and sheep and lambs were bought instead. Although
there was no evidence to this effect, it is not unreasonable to assume that at
least some of the sheep and lambs were themselves sold. There is substance in the pursuer's
submission that the inheritance money, having been put into the business, had
been converted into other assets of the business. For that reason, I am of the opinion
that the inheritance money became a business asset and accordingly, forms part
of the matrimonial property.
Single Farm Payment.
The only other issue which was
contested was whether the value of the Single Farm Payment should be considered
as matrimonial property. It was not
disputed by the defender that the sheep quota valued at the relevant date at
£783 was matrimonial property. The Single
Farm Payment was due to be paid to the defender in terms of the 2003
legislation, but was not payable until
2005.
The cases cited were MacRitchie -v- MacRitchie, Skarpass -v- Skarpass and
Tyrrel- v- Tyrrel. In MacRitchie,
Sheriff Principal Risk held that a refund of income tax due to the defender and
attributable to the period before, but received after, the relevant date was
matrimonial property. In his opinion,
the term "matrimonial property" was apt to cover heritable and corporeal
moveable property and cash. He said, "A
right to payment which exists at the relevant date is matrimonial property even
if payment is not demanded or made until after the relevant date." (1994 SLT
(Sh.Ct.) at 73C). Again, "The proper
question is whether at the relevant date the defender had a right to the money
which he subsequently received." (73G). Sheriff Principal Risk followed the approach
in Skarpass.
In Skarpass, the defender who was injured during the marriage, but
before the relevant date, was awarded damages which were paid after the
relevant date. It was argued that while, at the relevant date, the defender had
an assignable claim, it had no value until the case was settled or decree was
granted in his favour. Both the Sheriff
and the Sheriff Principal rejected that.
The Sheriff Principal stated, "It cannot be said that prior to the
relevant date the claim necessarily had no value at all, and no doubt a
potential assignee would have been prepared to make him an offer for it." (1991 SLT (Sh.Ct.) 15 at 20H.)
In Tyrrel, Lord Sutherland held that a redundancy payment was not
matrimonial property because it was payment for loss of employment and not
something towards which the employee contributed anything during the
employment. His Lordship said, "There
can be no question of any part of the potential redundancy payment being vested
in an employee during his employment as, of course, it came into effect on his
dismissal." (1990 SLT at 408)
The Single Farm Payment is something
to which the defender was entitled at the relevant date. Not only had the relevant
The total value for the matrimonial
property at the relevant date would be as follows:-
|
1. The stock and other assets of
|
£ 114,109.20 |
|
2. Cash in the bank. (No.6/2/2
of Process, sheet 274) |
£ 21,036.42 |
|
3. The pursuer's business,
valued at |
£ 21,906.00 |
|
4. The defender's policy, valued
at (as per Joint Minute) |
£ 1,433.87 |
|
5. The pursuer's policy, valued
at (as per Joint Minute) |
£ 3,198.99 |
|
6. The defender's dogs, valued
at |
£ 1,500.00 |
|
£ 4,250.00 £ 13,434.28 £ 29,670.00 |
|
Total |
£ 210,538.76 |
|
|
|
From that figure, one has to deduct
the liabilities of the farm at the relevant date, i.e. £28343. (No.6/2/2 of
Process) leaving a net total of £182,195.76, one half of which would be
£91,087.88. I am not persuaded that there are any special circumstances which
justify a departure from the norm of equal sharing.
When the pursuer left the matrimonial
home, she took her dog business with her and her policy. The value of that
business at the relevant date was £21906.and the value of her policy was £3,198.99,
making a total of £25,204.99. Taking that figure from £91,087.88 leaves £65,882.89.
It is accepted that, on
The asset value of the farm, the
money in the bank, the fact that the defender has been receiving the Single
Farm Payment and inherited approximately £58,000 from his father means that the
defender is able to pay the remaining sum due to the pursuer. As
invited by the pursuer, I shall award her interest at the judicial rate from the
date of citation, i.e.