The case of Stephen and Ellen Debruin, recently the subject of an application for leave to appeal by Mr Debruin, reopens the argument about whether the current wide discretion of judges in our divorce laws results in consistent and fair results.
Many applaud the English divorce system because it allows judges to make a fair decision in a variety of different circumstances, some of which could never be covered adequately by a more regimented system.
This case was first decided in 2013. At that hearing, Mrs Debruin (pictured) was awarded the family home in Essex as well as the holiday home in Turkey and a joint endowment policy. She was also awarded £800 per month maintenance and retained a pension valued at about £70,000. This award amounted to a total of about £1.3m. By contrast, Mr Debruin was allegedly left with two industrial units with a value of £97,000 and liabilities of £126,000.
The courts’ approach is to assess a fair division based on the criteria set out in section 25 of the Matrimonial Causes Act 1973. Then, following a line of case law dating back to the landmark case of White and White, check their division against the ‘yardstick of equality’. If there is a significant departure from equality one would expect to see detailed reasoning in the judgment explaining how and why the judge used their discretion to arrive at the decision .
In this case, Mr Debruin argued that the judge failed to give any reasoned explanation to warrant such a significant departure from equality and a fair outcome. He also argued that the judge had failed to assess his income and his own income needs, and whether or not Mrs Debruin was able to work and therefore contribute towards her own income needs.
Mrs Debruin argued that her husband had failed to disclose assets, suggesting there should be an inference drawn by the judge that Mr Debruin may have access to other wealth. In addition, there is a further argument centred on the property, which had been transferred into a company prior to the proceedings, raising the issue of whether or not the property is in fact a matrimonial asset.
Since the original order was made in 2013, Mr Debruin has refused to comply with the terms of the order and Mrs Debruin has remained in receipt of benefits.
This case is not by any means a big-money case. It is representative of a vast number of divorces which reach the doors of court on a daily basis. In much of the south-east, a couple with a reasonably sized family home where the mortgage has been substantially paid off would find themselves with assets at this level. However, the difficulties in challenging an award in such a case are significant.
First, Mrs Debruin has not received the settlement awarded. Having gone through the court procedure, which would have taken many months, and having relied upon the 2013 hearing to give her some degree of finality, she is now 18 months further down the line and finds herself in the same position.
She remains on benefits with continued uncertainty about her future, not to mention the legal fees she has had to fund to get to this unsatisfactory position. Mr Debruin, on the other hand, finds himself with what he believes to be a grossly unfair outcome, where he is left with nothing to show for a marriage of 20 years during which he worked to provide for his family. He can either take things further at an enormous cost which he can ill afford, or accept things as they are and try to make the best out of the situation.
Many couples find themselves in the position of wanting to challenge the judge’s decision but are simply unable to do so, not least because of additional litigation costs, but also because of the time involved. By the time a divorcing couple have reached final hearing, they have probably been separated for upwards of 12 months with their lives on hold. Appealing the decision will extend this period of uncertainty, and their finances can often not sustain yet further legal argument. This is why cases reaching the Court of Appeal are those involving what we all refer to as ‘big-money cases’.
To pursue the matter, Mr Debruin will have to show that the judge failed to take into account the section 25 criteria in assessing a fair outcome, and that the decision was so plainly wrong that it is a decision another family judge would not have made hearing the same argument. In light of the fact that there is such a wide discretion this is no easy task, and in pursuing this course of action there is an inherent risk. The decision could be that, although the decision may be one which the appeal court judge would not have made, it is still within the ambit of the original judge’s discretion.
The other issue to be addressed is whether or not the house should have been included in the matrimonial assets for division in the first place. This argument is one visited on several occasions by the courts and remains an area of uncertainty. If property is owned by a company, which is by its very nature a separate legal entity, why should the divorce court be able to go behind that and treat the company assets as if they belonged to the parties to the divorce proceedings?
This issue was addressed at length in the recent case of Petrodel Resources Ltd v Prest  UKSC 34. The court clearly stated that piercing the corporate veil was an action which should only be used in exceptional circumstances where there was a clear abuse of the corporate legal personality. However it also made the point in Prest that the beneficial ownership of assets within the company would be fact-specific.
The court will therefore be looking at who provided the purchase money for the house, the purpose of the transfer to the company and the parties’ intentions, as well as the use of the property, which in this case appears to have been the family home.
Amanda Melton is a partner in the family team at IBB Solicitors