SG v PG

In ancillary relief proceedings, the court determines beneficial ownership from the parties’ actual intentions and the surrounding evidence. A presumption of advancement is readily rebutted where the evidence shows that a child acted as attorney for the parent and used the parent’s money. A power of attorney may authorise the donee to transact in his own name on the donor’s behalf. Large gifts from vulnerable and dependent parents to a trusted child may be set aside for undue influence where they call for an explanation. Deceitful removal of money during the marriage may constitute conduct which it is inequitable to disregard, but its effect remains fact-sensitive. An adjournment of a lump-sum claim is exceptional and should be avoided where it would create further uncertainty and litigation.

The applicant wife sought ancillary relief following the breakdown of a marriage lasting seven years. The principal dispute concerned five properties and a mortgage repayment funded by the husband’s parents. The wife alleged that the money had been gifted to the husband. The husband maintained that he had acted as his parents’ attorney and that the mortgage repayment was a loan.

The wife also alleged that the husband had undeclared business income. The husband’s father, represented by the Official Solicitor, and the estate of the husband’s late mother intervened because the ownership of the funds affected their interests. The court had to determine ownership, the effect of the wife’s removal of cash, the appropriate financial orders, and responsibility for the interveners’ costs.

1. Ownership of the properties and mortgage repayment. The husband’s parents had supplied the purchase money and the mortgage repayment, but the evidence showed that the husband acted bona fide under powers of attorney. The transactions were therefore carried out on his parents’ behalf. The properties and the repayment were not gifts to him.
2. Presumption of advancement. The presumption did not determine the result. The court had direct evidence of intention, including the parents’ financial planning, their need to retain capital, the powers of attorney, separate accounts and the husband’s conduct. Any presumption was rebutted on the facts.
3. Undue influence. If the money had been gifted, the alternative defence would have succeeded. The parents were vulnerable and dependent on the husband, and gifts representing most of their free capital would have called for an explanation. The husband’s expected inheritance did not adequately explain gifts of that magnitude. The transactions would have been set aside.
4. Conduct and undisclosed income. The wife’s prolonged and deceitful removal of cash was capable of being conduct which it was inequitable to disregard under section 25 of the Matrimonial Causes Act 1973, but the judge declined to discount her award. The husband was nevertheless credited with additional income of £5,000 per year, subject to declaration for tax purposes.
5. Financial orders. The application to adjourn the lump-sum claim was refused. Such an adjournment was uncommon and would create further uncertainty and a substantial risk of renewed litigation. The wife received £220,000, pension provision and periodical payments of £500 per month for 18 months followed by £300 per month for two years. The interveners’ costs were payable by the wife.