Calderbank v Calderbank

[1975] 3 ALLER 333

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(Judgment by: Cairns J)

Calderbank
vCalderbank

Court:

Judges:
Cairns JScarman LJ
Sir 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:
Cairns J

I entirely agree with the judgment Scarman LJ has delivered. In Wachtel v Wachtel ([1973] 1 All ER 829 at 840, [1973] Fam 72 at 95) it was held by this court that in considering any periodical payment or any lump sum to be awarded to a wife after divorce the starting point should be that she should have one-third of the joint income and one-third of the joint assets. It was recognised that this was simply a fraction which might be considered appropriate in the ordinary case where the husband has been the earner of the whole or substantially the whole of the family income, where he will be making periodical payments to his wife and where he may be expected to have the greater call on future earnings.

No such starting point is appropriate where it is the husband who is the applicant for a lump sum because there is no ordinary or usual case in which the wife is in the position to provide a lump sum for the husband. Every such case when it does occur is exceptional and the courts must simply decide on the basis of the criteria laid down in s 25(1) of the Matrimonial Causes Act 1973 what is the right sum to award. I see no reason to suppose that Heilbron J overlooked any of the matters set out in paras ( a ) to ( f ) of that subsection, though it is true that she concentrated mainly on the needs of the husband. Insofar as she decided that the husband had the need, if the former matrimonial home were sold, for a sum of money to enable him to obtain a new house I think that her finding is quite unassailable.

It is complained that the learned judge did not take sufficiently into account the husband's earning capacity or the expectation that he would not contribute to the maintenance of the children of the marriage or his occupation of Rudford House at the wife's expense for several years after the parting. The learned judge did refer to all these matters in the course of her judgment and I cannot see that it could be said that she gave insufficient weight to them. £10,000 is after all not a large proportion of £78,000.

The main attack on this judgment has been that the judge failed to consider whether the wife had an obligation to the husband to provide him with money for a new house. Insofar as obligations and responsibilities are referred to in s 25(1)( b ) I am of opinion (and it is accepted by counsel for the wife that this is the right interpretation) that the obligations and responsibilities there mentioned are obligations and responsibilities to persons other than the other spouse. But the overall consideration which is contained at the end of the subsection is in these words:

"... and so to exercise those powers [that is powers to make financial provision in one way or another] as to place the parties, so far as it is practicable and, having regard to their conduct, 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.'

If the learned judge did not direct her mind to this part of the subsection, and I would hesitate to hold that she did not although she did not refer to it expressly, I am quite satisfied that if she had done so she would not have and should not have awarded any smaller sum. I do not consider that in that passage the phrase 'obligations and responsibilities' means legally enforceable obligations and responsibilities. What falls to be considered in my view are the obligations and responsibilities which any reasonable spouse dealing with the other spouse and living in the circumstances of a normal family life would recognise as being owed to that other spouse.

In my judgment in all the circumstances of this case if the marriage had not broken down and each spouse had properly discharged his or her obligations and responsibilities to the other the financial position of the parties would have included a continuance of the situation of the husband living in a house for which he had not to pay. Since it is not now practicable that he should continue to live in that house I think it was quite right for the learned judge to award him such lump sum as would provide a suitable house for his needs. £10,000 could not be considered as an excessive sum for that purpose. It will not of course provide him with so fine a house as Rudford House, and on the other hand of course the wife's financial position will be somewhat worsened inasmuch as her capital will be reduced by £10,000. But it is hardly ever practicable to avoid some worsening of the financial position of one or both parties to a marriage when the marriage is dissolved. I do not think that the object of s 25 in this case could have been better implemented than by the award the learned judge made and I therefore agree that the appeal should be dismissed.

COSTS HEARING

The court has had before it an appeal relating to proceedings which came before Heilbron J relating to financial matters as between husband and wife, the proceedings having been based on an application by the wife under s 17 of the Married Women's Property Act 1882 and an application by the husband under s 24 of the Matrimonial Causes Act 1973. The result of the proceedings was that in respect of the house that had been the matrimonial home and which was the subject of the application under the 1882 Act, Heilbron J declared that the wife was entitled to the whole of the interest in that house. With regard to the application under the 1973 Act she found that the husband was entitled to a lump sum in payment by the wife of £10,000. She directed the sale of the house, which was one of the matters that the wife had applied for in the s 17 application, and the payment of the lump sum to the husband out of the proceeds of the sale of the house.

The wife appealed to this court against the lump sum order and judgment was given against her this morning dismissing that appeal. Apart from her appeal with regard to the lump sum she appealed against Heilbron J's order as to costs, which was an order that each party should pay his or her own costs of the proceedings before her. It is contended on her behalf that she had been wholly successful in the s 17 proceedings and that although the husband was awarded a lump sum in the s 24 proceedings nevertheless the wife should have the costs of those proceedings in the court below because there had been an offer by her which was equivalent to more than the £10,000 lump sum awarded to the husband.

Before Heilbron J the wife's application for costs was based on a letter which had been written by the wife's solicitors to the husband's solicitors offering something substantially more than £10,000. Heilbron J, despite that letter being drawn to her attention, made no order as to costs. Immediately after the hearing before her it was discovered that that was a without prejudice letter and very properly at the opening of this part of the appeal counsel for the wife asked for the court's guidance whether in those circumstances he was entitled to rely on that letter. We formed the opinion that he was not. The letter was written without prejudice. The without prejudice bar had not been withdrawn and therefore we took the view that it was a letter which could not be relief on either before the judge at first instance or before this court. Counsel for the wife then indicated the difficulty that a party might be in in proceedings of this kind when he or she was willing to accede to some extent to an application that was made and desired to obtain the advantages that could be obtained in an ordinary action for debt or damages by a payment into court, that not being a course which would be appropriate in proceedings of this kind.

There are various other types of proceedings well known to the court where protection has been able to be afforded to a party who wants to make a compromise of that kind and where payment in is not an appropriate method. One is in proceedings before the Lands Tribunal where the amount of compensation is in issue and where the method that is adopted is that of a sealed offer which is not made without prejudice but which remains concealed from the tribunal until the decision on the substantive issue has been made and the offer is then opened when the discussion as to costs takes place. Another example is in the Admiralty Court where there is commonly a dispute between the owners of two vessels that have been in collision as to the apportionment of blame between them. It is common practice for an offer to be made by one party to another of a certain apportionment. If that is not accepted no reference is made to that offer in the course of the hearing until it comes to costs, and then if the court's apportionment is as favourable to the party who made the offer as what was offered, or more favourable to him, then costs will be awarded just on the same basis as if there had been a payment in.

I see no reason why some similar practice should not be adopted in relation to such matrimonial proceedings in relation to finances as we have been concerned with.

Counsel for the husband drew our attention to a provision in the Matrimonial Causes Rules 1968a with references to damages which were then payable by a co-respondent, provision to the effect that an offer might be made in the form that it was without prejudice to the issue as to damages but reserving the right of the co-respondent to refer to it on the issue of costs. It appears to me that it would be equally appropriate that it should be permissible to make an offer of that kind in such proceedings as we have been dealing with and I think that that would be an appropriate way in which a party who was willing to make a compromise could put it forward. I do not consider that any amendment of the Rules of the Supreme Court is necessary to enable this to be done.

Putting aside altogether this without prejudice letter, counsel for the wife says nevertheless he is entitled to the costs in the court below because of an offer which was contained in an affidavit sworn by the wife on 10 August 1974. His contention applies of course only to costs incurred after that date. The offer was in this form:

'I am willing, and have always been willing, to make over to the [husband] the house at Alderley Edge'. That was not the matrimonial home. It was a house which had been in the occupation of the husband's mother but was in fact the property of the wife. It was common ground before the learned judge that the value of that house was about £12,000.

I have reached the conclusion that that was an offer which in the circumstances of this case the husband ought to have accepted and that, as he persisted in these proceedings and recovered a lump sum of a smaller amount than the value of that house, the right order would be that he should have the costs up to 14 days after 14 August and thereafter that the wife should have her costs of the proceedings in the court below.

So far as the costs of this appeal are concerned clearly the husband is entitled to those. The appropriate order will be that there should be a set-off of one set of costs against the other. If on balance costs are payable by the wife to the husband that will be an end of the matter, but if on balance costs are payable by the husband to the wife the court then has to take into account the fact that the husband is legally aided. It is not at this stage possible to say how the court should exercise its discretion under the Legal Aid and Advice Act 1949, and because he is legally aided he cannot in respect of the period during which he was in possession of a legal aid certificate (which I take it was from some date before the hearing before Heilbron J), have an enforceable order for costs made against him until an assessment has been made under the 1949 Act. Such an assessment can only properly be made after it has been ascertained what balance if any would apart from such an order be payable by the husband and therefore I would direct that the order for costs should not be enforceable without further order of the court, if on balance a sum is payable by they husband and not by the wife.