A summary of the ruling by the Court of Appeal in the recent case of Mansfield v Mansfield (2011)

A summary of the ruling by the Court of Appeal in the recent case of Mansfield v Mansfield (2011) which found where a husband had invested his personal injury compensation in a bungalow adapted for his special needs, a lump sum to his wife in ancillary relief proceedings should be upheld but the order converted to one in his favour by way of a charge on the property to be purchased by the wife, providing for her needs as the children's primary carer but terminating on their majority or when they left tertiary education.

Prior to the marriage the husband has received personal injury damages of approximately £500,000 in 1998, as a result of which injury he was partially disabled. The husband invested the award in two properties, a home adapted to suit his disabilities ("The Orchards") and an investment flat which provided a rental income.

The parties were married in 2003 and the wife invested the proceeds of sale of her own home, some £30,000, in The Orchards.  There were twin children of the marriage, aged 4 at the time of the appeal.

They separated in 2008, when the wife and children moved into rented accommodation, and the parties were subsequently divorced.

At first instance the ancillary relief issue went before the district judge in May 2010.  The District Judge awarded the wife a lump sum of £285,000 to purchase a property giving the husband three months to raise that sum, failing which The Orchards should be sold, and the wife receive £285,000 from the proceeds of sale, or 63% of the gross sale price, whichever was the greater to enable the wife to purchase a property.

This would leave the husband with some £290,000.  The husband's arguments that the wife should receive a lower award subject to a Mesher provision were rejected.

The husband's appeal to the circuit judge was dismissed and the husband then appealed to the Court of Appeal seeking a substantial reduction in the award or, alternatively, a charge back.

Despite this being a second appeal, permission was granted and the appeal allowed in part.

The court was entitled to exercise its own discretion in relation two facets of the award, namely quantum and whether there should have been a charge back.

The Court of Appeal considered that the District Judge had misdirected herself in law: although she was correct that the origin of the assets did not exclude them from the court's dispositive powers, each case turned on its own facts and in many cases sharing must be tempered to reflect the particular needs of the recipient of the damages, as well as the nature of the acquisition of the capital. While the Court would not interfere with the district judge's award of £285,000, that award was to be made subject to a Mesher provision of one third, realisable on the twins' maturity, to reflect the origin of the assets and in light of the husband's likely increased needs at that time.

A Summary of the Case is listed below:

‘The fact that a personal injury award received by the husband had been a major source of the family capital justified the making of a Mesher order whereby the property to be purchased by the wife for her and the children's use would be charged as to one third of its equity in favour of the husband’.

‘The appellant husband (H) appealed against a judge's decision to uphold an award made by a district judge on an application for ancillary relief. H and the respondent wife (W) had cohabited for roughly six years and been married for over four. They had two children, who were living with W. H had received damages of approximately £0.5 million in a personal injury claim which had been resolved before he met W. He invested his compensation in the purchase of two properties, namely a bungalow, which was adapted to cater for his disabilities, and a flat, which was let out for rent. The bungalow became the matrimonial home and H continued to reside there after the separation. W had invested about £30,000 in the improvement of the bungalow. The district judge concluded that, in order to enable W to purchase a property which was suitable for herself and the children, taking into account the fact that she had a mortgage potential of £42,000, H should pay her a lump sum of £285,000.

HELD: The district judge had misdirected herself when referring to Wagstaff v Wagstaff which dealt with the effect of a personal injury award received by one spouse on an application for ancillary relief. The district judge had correctly noted that the fact that the capital had come by way of compensation did not exclude it from the court's consideration; however, she seemed to have omitted to apply the second and important qualifying part of the guidance, namely that each case had to be looked at on its facts and that 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 (see para.15 of judgment). The district judge had examined the respective needs of the parties with considerable care and she had been entitled to assess the lump sum payable at £285,000. However, 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 her 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, W's need for a substantial share rested on her function as the primary carer. She had to provide the primary home and that need had a reasonably obvious termination on the majority or the conclusion of tertiary education of the children. Neatly, it was just at the stage that H's need for a return of capital was likely to be augmented by the ordinary processes of ageing, which were in turn likely to accentuate his disabilities. Accordingly, the exceptional factor in this case, namely the origin of the family capital or the vast majority of it, made it particularly suitable for the application of a Mesher order. The property to be acquired by W in an assumed purchase at about £285,000 would be charged as to one third of its equity in favour of H, that charge to be redeemed when the children achieved maturity, Wagstaff applied (paras 21-23)’.

Hilary Meredith Solicitors specialise in Personal injury claims including Military Accidents, and Serious Injury Claims.  We represent those individuals who have sustained Serious injuries in accidents/incidents at a number of destinations across the globe. 

The majority of Personal Injury claims settle without the need to attend Court; however Court proceedings in any civil personal injury claim must be brought within 3 years of the date of the accident/injury.  If Court proceedings are not issued within 3 years of the date of the accident/injury then your claim would be statute barred and you could effectively lose the right to claim personal injury compensation. 

If you, your friends or family are suffering from any personal injury caused by an accident and/or service/Military accident in the forces you may be entitled to claim compensation for Personal Injury.  You should contact our firm without delay to speak with a member of our specialist Military Accident and Serious Injury Claims team who will advise and act for you under a No Win No Fee agreement where you are guaranteed 100% of your personal injury compensation.

You can even start your Personal Injury and/or  Military Accident claim on our website www.hmsolicitors.co.uk.  Alternatively, to speak to our specialist Military Accident and Serious Injury Claims team call us free on 0800 124 4444.