| HUSBAND AND WIFE — Divorce — Ancillary relief — Lump sum award — All capital arising from wife’s pre-owned assets — Whether equal division of assets appropriate — Matrimonial Causes Act 1973, s25 (as substituted by Matrimonial and Family Proceedings Act 1984, s3)
B v B (Ancillary Relief: Distribution of Assets) [2008] EWCA Civ 543; [2008] WLR (D) 90
CA: Sir Mark Potter P, Wall and Hughes LJJ: 19 March 2008
In ancillary relief cases the source and origin of assets was one of the factors that had to be taken into account in determining distribution since the primary objectives of the exercise were fairness and an absence of discrimination between the parties.
The Court of Appeal so held when allowing the wife’s appeal against the order of the circuit judge upholding the order of the district judge who had declined to depart from the yardstick of equality when ordering the transfer of assets between the parties in ancillary relief proceedings, and dismissing the husband’s cross-appeal against the judge’s findings on property value. The grounds for the wife’s appeal were, inter alia, that the orders below had failed to take sufficient account of the fact that all the parties’ assets had their origin in money which she had brought into the marriage.
HUGHES LJ said that the wife’s principal complaint was that the search for equality was misplaced since all the capital introduced into the marriage came from the wife’s pre-owned assets and the 12-year marriage itself had played no part in the acquisition of any assets now available. It did not seem that the case raised any new point of principle but required the application of well-understood principles to its own unusual facts: that the entirety of the assets were pre-owned by the wife, a substantial period had been spent living entirely upon those assets and there was a car-wash business, in which the husband was working, generating a sizeable income but with no significant capital value except in the premises which had been provided by the wife alone. In all cases the essential search was for fairness. White v White [2001] 1 AC 596, 610 had recognised that one possible reason for departing from equality was where assets were the product of inheritance by one spouse alone, an approach which would normally accord with the ordinary sense of fairness of people in general. Desirable as a clean break would be, it could not be achieved at the same time as dividing the assets equally since, without a significantly larger part of the capital than half, it was not possible to predict a time when the wife could be expected to be self-supporting. The objective of securing a fairer distribution of capital giving proper recognition to its source would be best achieved by granting the wife that larger proportion, permitting the husband to continue in sole occupation of the premises for the purposes of his business for as long as he wished, dividing the proceeds of the carwash business, if and when sold, equally between the parties and in the meanwhile payment of rent for the premises by the husband to the wife at half the current market rent. Accordingly the orders made below would be set aside and appropriate orders substituted to achieve that outcome.
SIR MARK POTTER P agreed.
WALL LJ, in a concurring judgment, stated that, so long as ancillary relief matters were governed by s25 of the Matrimonial Causes Act 1973, the outcome of every case was a matter of judgment. The court should ask itself (1) whether the outcome was fair in all the circumstances of the case, and (2) was it in any way discriminatory? Of course the court had to follow White v White and look at the extent to which the court had departed from equality but in his Lordship’s opinion that latter exercise was a check; the primary objectives remained fairness and an absence of discrimination.
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