Calderbank v Calderbank

[1975] 3 ALLER 333

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(Judgment by: Scarman LJ)

Calderbank
vCalderbank

Court:

Judges: Cairns J

Scarman LJSir Gordon Willmer

Subject References:
Ancillary proceedings
Circumstances in which order should be made in favour of husband
Compromise offer
Costs
Divorce
Financial provision
Husband
Husband having adopted style of life made possible by wife's capital resources
Husband having no capital assets
Lump sum order in favour of husband
Matrimonial Causes Act 1973 - ss 23, 25
Offer rejected
Offer by party before hearing
Offer exceeding award made at hearing
Offer made without prejudice to issue at hearing
Order in favour of husband
Whether in making offer party entitled to reserve right to refer to offer in relation to costs
Whether order should be made in husband's favour only in exceptional circumstances
Whether party making offer entitled to costs subsequent to offer
Whether spouses should be treated on equal basis for purpose of applications for financial provision
Wife possessing substantial capital assets
Wife under no duty to maintain husband

Case References:
Wachtel v. Wachtel - [1973] 1 All ER 829; [1973] Fam 72; [1973] 2 WLR 366
Griffiths v. Griffiths - [1974] 1 All ER 932; [1974] 1 WLR 1350

Hearing date: 4 June 1975
Judgment date: 5 June 1975

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Judgment by:
Scarman LJ

Scarman LJ delivered the first judgment at the invitation of Cairns LJ. This is an appeal from an order made by Heilbron J awarding to an ex-husband a lump sum of £10,000 on his application after divorce, an application which was made pursuant to s 23 of the Matrimonial Causes Act 1973.

The facts are these. Mr and Mrs Calderbank (and I shall refer to them as husband and wife though they are now divorced and each of them has remarried) were married to each other in December 1956. There are three children of the family, two boys aged 15 and 14 respectively, and one girl aged 12. All three children are at fee-paying schools. The husband and wife are now about 42 years old. They lived together at a number of addresses over a period of 17 years. In January 1973 the wife left home and she has since remarried. After she left home the wife brought divorce proceedings. The husband filed an answer in those proceedings and a decree nisi of divorce on the ground of adultery and the fact that he found life intolerable thereafter with the wife was granted to the husband on his answer. That decree has been made absolute.

The matter came before Heilbron J in the following way. In the divorce proceedings the wife made an application under s 17 of the Married Women's Property Act 1882 seeking a declaration that the matrimonial home, a house in Gloucestershire to which I shall refer, was her property beneficially. The husband made application under ss 23 and 24 of the 1973 Act seeking financial provision or alternatively a property adjustment order. On those applications Heilbron J after a full hearing and a very careful judgment made the following orders. On 5 December 1974 she made the declaration that the wife was seeking on her application under the 1882 Act. On that day she gave a full judgment dealing with all the circumstances of the marriage but adjourned for further consideration the applications being made by the husband. On 13 January 1975 she made the lump sum order in favour of the husband which is now challenged in this court.

In the course of her judgment Heilbron J went through the whole of the marriage history so far as it concerned its property and financial aspects, and counsel for the wife in this court has very conveniently summarised in the course of his argument the financial position as it was when Heilbron J considered these applications. At that time the wife was possessed of net capital of about £78,000. This represented two inheritances, one from her mother when she died in 1964 and the other from her father when he died in 1969. The husband had no capital whatever save for whatever interest he might possess in the furniture in the matrimonial home. The income position when the matter was before Heilbron J was as follows. The wife had a gross income from dividends and so forth arising from her estate of no more then £1,100 a year. The husband had in view, and has since obtained, a job bringing the salary of £2,500 a year, plus a likely expectation of bonuses ranging between £1,000 and £1,500 a year. I have already mentioned that both husband and wife have since the divorce remarried. The wife has now married a husband who himself has an income of £2,250 a year, but he has three children of his former marriage to support. The husband has also remarried a lady who is able to earn and does earn about £2,000 a year. The care and control of the children has been granted to the wife who is making herself responsible as she always has done for their maintenance and for the expense of their education at fee-paying schools.

The history of the marriage so far as the finances are concerned was this. They began life at a house at Whalley Range which the wife had bought prior to the marriage for about £1,500. They lived in this house until 1960 when it was sold. They then moved to a house in Cheadle which was bought with the proceeds of the sale of the house at Whalley Range. The husband was at this time working but earning no more than £70 a month. In 1961 they were anxious to start a business in which they could work together. The husband gave up his job. They found a farmhouse in Wilmslow which they bought for £5,500. This money was found partly from the proceeds of the sale of the earlier house; but the transaction was largely financed by the wife's father, who at that time was still alive. At this house they set up a kennels business, breeding and selling dogs, and for several years the husband and the wife worked in the business. It is clear from the evidence that the husband did help to build a number of breeding blocks but the finance for the business was provided from the wife and the wife's father. As the years went by the business grew, staff were taken on and it reached its climax as a business in about 1972. Thereafter the business has declined and is now showing a loss.

When the wife's mother died in 1964 she inherited about £30,000, and when her father died in 1969 she inherited another £50,000. The wife has shown herself throughout the family life alive to her responsibilities towards the family. It is to be noted that in June 1970 she bought a house at Alderley Edge and made it available for the occupation of the husband's mother. With the access of capital which came to her on the death of her two parents, the wife and husband thought the time was opportune to acquire a very much larger and more luxurious house than had been the matrimonial home in the past. Consequently in 1970 or thereabouts Rudford House, Gloucestershire, was purchased with the wife's moneys for some £16,500. Although the house was put into the name of the husband for fiscal reasons, it was purchased and its outgoings met by the wife's funds. The husband made no financial contribution whatever towards the purchase of Rudford House which on its purchase became the matrimonial home and in which the husband has lived ever since it was purchased and in which the wife also lived until she left home in January 1973.

I have mentioned that the husband gave up his job when they decided to go into the kennels business. In fact during the currency of the marriage the husband never thereafter did another job, though as I have mentioned he has obtained one since the breakdown of the marriage. The husband met his current expenses out of a joint account maintained by himself and his wife; that account was kept in funds to some extent (I suppose) from the profits of the kennels business, and, if the extent of those profits was not sufficient, by funds made available by the wife. When they moved from the farm which had the kennels to the house in Gloucestershire, they took much less part in the day to day management of the kennel business. Indeed it would appear that a manager was installed and they contented themselves with supervision at a distance and with regular weekly visits to the kennels. The husband did nothing other than live at home and pay those weekly visits.

Thus immediately before the breakdown of the marriage the situation was as follows. The husband and wife were living at their large establishment in Gloucestershire financed by the wife's money. Their children were being educated at fee-paying schools financed by the wife. The husband had no job other than such interest as he took in the kennel business which after 1972 began to ail. The wife was busy with her family life and the management of her property and the kennels, and had such income as was derived from her investments. I should add that the husband is not to be regarded as a layabout or as someone who has hung up his hat in the wife's house and made a decision there to live. The judge did not take that view of the husband at all. He had suffered early in life from poliomyelitis. One of the consequences of the disease, from which he made a remarkable recovery, was that he was physically weakened to some extent. The evidence indicates that he suffered from time to time from breathlessness and, if he was not careful, was subject to bronchitis.

So for 17 years they lived, basing their family finances on the funds belonging to the wife. The learned judge looked carefully at all matters to which I have referred and appreciated the degree to which the husband during the married life was financially dependent on the wife and also the degree to which the wife admirably fulfilled her financial responsibilities to the family. The learned judge also noted that since the breakdown of the marriage both the husband and the wife had acquired a greater source of income than they had had prior to the breakdown. The husband had got a job worth about £4,000 a year and married a lady who herself was earning. The wife had her capital resources and had married a man who had an income, though he had heavy commitments. It is plain from a reading of the judgment that the judge carefully directed herself along the lines set out in s 25 of the Matrimonial Causes Act 1973, and she bore in mind all the matters to which I have referred. Having done that, she expressed herself in these terms. She said she did not think it could seriously be contended that the provisions of the new legislation do not apply to husbands as well as to wives. She appreciated that the factors to be taken into consideration under s 25 were factors relating to both parties, but also realised that decision must be affected according to whether the party seeking the transfer of property or lump sum was the husband or the wife; and she bore in mind, and said so expressly, 'that the financial needs, obligations and responsibilities which the wife has for the family in the foreseeable future are extensive, the husband's are negligible'.

Counsel for the wife attacks the award of a lump sum of £10,000 to the husband on the following grounds. He accepts that the 1973 Act confers power on the court to order a woman to make financial provision, be it by periodic payment or lump sum for her ex-husband, but he submits that on a proper construction of the guideline section (ie s 25 of the 1973 Act) it would not be proper for the court, save in exceptional circumstances, to make an order on a woman for the financial support of her exhusband. His argument is in origin an historical one although it develops into an argument on the construction of the section. Historically he puts it in this way. He says, rightly, that at common law a husband was liable to maintain his wife but a wife was never liable to maintain her husband. He says that this common law still remains the basis of the financial responsibilities of a husband and wife, and he points to s 27 of the 1973 Act as indicating that the common law basis still remains so long as the parties are married. That section, which is a re-enactment of previous sections, provides that either party to a marriage may apply to the court for an order on the ground that the other party, if he be the husband, has wilfully neglected to provide reasonable maintenance for the wife, or, if she be the wife, has wilfully neglected to provide, or to make a proper contribution towards reasonable maintenance, for a husband whose earning capacity is for one reason or another impaired. In short, the section does enable the court only in exceptional and specified circumstances to make a financial order on the wife in favour of the husband. Counsel for the wife says that the section implicitly recognises the continuance of the common law principle that a husband must maintain his wife but that a wife is under no obligation to maintain her husband.

Whatever be the position today as between husband and wife while they are still married, it is abundantly plain that fresh powers have been given to the court to make financial and property adjustment orders on divorce, nullity or judicial separation. There is nothing in the relevant sections of the Act to indicate that the husband and wife are not for the purposes of those sections to be treated on an equal basis. The relevant sections are ss 21, 22, 23, 24 and 25. It will be observed that each of the sections refers to 'the parties to a marriage' and confers on the court precisely the same powers in respect of each party of the marriage, be it the husband or the wife. There is therefore nothing in the sections to suggest that only in exceptional circumstances may the court make a financial order by way of periodical payment or lump sum in favour of the husband. Basically the principle of the sections is that each spouse comes to the court on a basis of equality. But of course the court has to have regard to s 25, and the particular circumstances of the case. Counsel for the wife says, Yes; the court has the power to make an order in favour of either spouse, whether husband or wife; but, when one looks at s 25 it is clear, he says, that what really matters is to discover what are the obligations or responsibilities of the parties to the marriage, and counsel for the wife submits that where those words are used in s 25 they refer to legal obligations. He then reverts to his basic proposition that apart from statute there is no legal obligation on a wife to maintain the husband. I think that counsel for the wife's approach to the sections is misconceived and based on an erroneous construction of s 25. Really counsel for the wife is saying that we must read s 25 as stating impliedly, because it certainly does not say so expressly, that financial provision may be made for a husband only in exceptional circumstances. The section says nothing of the sort. The section requires the court to look at all the circumstances of the case and to make an order that is appropriate to the particular circumstances of the two spouses whose case is under consideration. I think the learned trial judge got it absolutely right when she said in the course of her judgment:

'The factors to be taken into consideration under s 25 are factors relating to both parties, but obviously considerations will vary according to whether the party seeking the transfer of property or lump sum is the husband or the wife.'

Of course the court has to take into account the fact that one party is the husband and the other is the wife. It has to take into account much else besides. It has to look to the income, earning capacity, property and other financial resources of the parties to the marriage. Who is the breadwinner, who the housekeeper? It has to look to the financial needs, obligations and responsibilities of the parties to the marriage both at the time that the matter is before the court and in the foreseeable future. It has to look to their standard of living, to their age, to any physical or mental disability and to contributions made by each to the welfare of the family, for example working in the home. Finally the court has to exercise its powers so as to place the parties, so far as it can and it is just to do so, in the financial position in which they would have been if the marriage had not broken down and each had properly discharged his or her financial obligations and responsibilities towards the other. In the present case the judge came to the conclusion that there was a need of the husband for some capital to enable him to acquire, no doubt with the aid of a mortgage, a house suitable to his station in life and suitable for the accommodation of the three children when they came to stay with him.

Counsel for the wife says that such a need if it exists is not one which under the section should be met by the wife. But there is no prohibition in the section on the court ordering the wife to meet that need if in the light of all the other circumstances to which I have referred it is reasonable that she should do so. And here when one stands back and looks at the broad outline of the married life one sees this picture: that over a period of 17 years this family, that is the husband, the wife and the children, have looked to the wife's capital resources to finance them. The wife has done admirably by her family. She has made those resources available and the husband with her full consent has adopted his life style--working for a number of years at a business financed by the wife, living in a large and elegant house which the wife bought when she came into her family fortune, and dependent on her resources. So if one looks at the standard of life enjoyed by the family before the breakdown of the marriage, this is what it was--a high standard supported by the capital resources of the wife. Now on divorce the learned trial judge has thought that about one-eighth of those capital resources, that is to say £10,000 out of the sum of £78,000, should be made available to the husband so that, no longer able to live in the family house which by order of the court is now the property of the wife, he can at least have a home suitable to his way of life in which he can live and in which he can see his children. It is very difficult to fault the judge's conclusion except on the theoretical or conceptual basis advanced by counsel for the wife that really this Act does not provide that a wife should make financial provision for her husband save in exceptional circumstances. Such a provision cannot be found in the relevant sections; on the contrary, they make fresh provisions for regulating the financial arrangement between parties to a marriage which has broken down. It therefore becomes quite impossible in my judgment to fault the exercise of the discretion of the judge in making an order for a lump sum.

Counsel for the wife has further developed the point that in any event the lump sum order was too high. Certainly it was a very substantial order. One must bear in mind, as the judge bore in mind, that the wife is maintaining the children, is continuing to pay for their education and has a considerable burden of debt, secured of course on her considerable assets. One must also bear in mind that, with the questionable exception of the income now accruing to her by reason of her remarriage, she does not have a very healthy income position. It is reasonable to infer that she and, so long as the children are dependent on her, the children will have to depend much more on her capital resources than on her income; and of course capital resources, if not augmented by income, have, particularly these days, a disastrous habit of disappearing. Nevertheless her capital resources are considerable and, when she has sold Rudford House, her liquid resources will be very much more considerable than they are at present.

The judge took the view that resources of the order of £78,000, a substantial proportion of which will become liquid when Rudford House is sold, were such that it would be proper in all the circumstances to allow the husband £10,000 to meet the need I have described. I think that the order was one which it was well within the discretion of the judge to make and I cannot see that it was either so large that this court must interfere as a matter of law, or that the judge took into account matters which she ought not to or failed to take into account any matters which she should have done.

At the end of the day after a very careful judgment the judge came to a fair and sensible decision, and, speaking for myself, I rejoice that it should be made abundantly plain that husbands and wives come to the judgment seat in matters of money and property on a basis of complete equality. That complete equality may, and often will, have to give way to the particular circumstances of their married life. It does not follow that, because they come to the judgment seat on the basis of complete equality, justice requires an equal division of the assets. The proportion of the division is dependent on circumstances. The assets have to be divided or financial provision made according to the guidelines set out in s 25. Every case will be different and no case may be decided except on its particular facts. This is what the judge did in this case and for myself I think she came to a correct and fair decision and I would dismiss the appeal.

COSTS HEARING

I agree.