Dharamshi v Dharamshi
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE THORPE,LORD JUSTICE SCHIEMANN,LORD JUSTICE ALDOUS |
| Judgment Date | 05 December 2000 |
| Judgment citation (vLex) | [2000] EWCA Civ J1205-3 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | CCFMI 2000/0161/B1 |
| Date | 05 December 2000 |
[2000] EWCA Civ J1205-3
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LINCOLN COUNTY COURT
(HIS HONOUR JUDGE JENKINS)
Lord Justice Aldous
Lord Justice Schiemann and
Lord Justice Thorpe
CCFMI 2000/0161/B1
MARTIN POINTER QC and GAVIN SMITH (instructed by Messrs Pannone and Partners of Manchester M3 2BU) appeared on behalf of the appellant.
PETER DUCKWORTH and KAREN SHUMAN (instructed by Messrs Bindman & Partners of London WC1X 8QF) appeared on behalf of the respondent.
Minaz Dharamshi is 42 years of age. He moved from Uganda to England in 1972 and ten years later launched Le Gem Products Limited in Leicester. He comes from an affluent family but there is no evidence as to the extent to which his family supported him in setting up business as a comparatively young man of 25. However it seems that the shareholding in the company was divided in some proportions between himself and his mother. In October 1984 he became engaged to Anisha who at that stage worked for Sainsburys. His progress was temporarily checked by a fire at the factory soon after their engagement but business was swiftly resumed on an alternative site. The young couple married on 31st October 1985 and their two children, Nurin and Iman were born respectively on 4th December 1990 and 19th May 1992. The wife had earlier given up her employment to devote her energies to the husband's business and to the family. When Iman was still a baby the husband's mother settled her shareholding in Le Gem on her grandchildren, appointing the husband and the wife as trustees of the settlement. The family prospered and the final matrimonial home was purchased in 1995 at a total cost to the husband of £165,000. It was newly built and the family were its first occupants. However by the following summer the marriage had broken down. The husband left in August and on 14th January 1997 he petitioned for dissolution on the grounds of conduct. In the same month he spent approximately £70,000 on a flat in Leicester which enabled him to offer staying contact to the children. Ancillary relief proceedings were initiated in October 1997 and the marriage was finally dissolved on 30th April 1998. At the end of that year the husband sold the company for approximately £6.6M gross. His share amounted to £4.5M gross subject to expenses of sale and a potential CGT liability of £1.8M. The ancillary relief hearing took place in July 1999 with a reserved written judgment despatched on 30th August. The implementation of that judgment resulted in further hearings in October 1999 and January 2000. The order as finally perfected in early February provided that:
1. The husband transfer to the wife the final matrimonial home and a motor car.
2. The husband pay the wife a lump sum of £1,050,000 together with a contingent lump sum representing 25% of the fruits of a CGT avoidance scheme.
3. The husband pay periodical payments at the rate of £5,000 per annum per child plus school fees.
4. The husband pay the wife's costs.
Stays were granted partly by the trial judge and partly by this court when leave was given on paper on 7th February.
Before the judge the wife was represented by Mr Duckworth who sought, in addition to the house and car, a lump sum of £1.75M together with a share of the fruits of the CGT avoidance scheme capped at £900,000. For the husband Mr Hayward-Smith QC submitted that the lump sum of £400,000 on top of the transfer of house and car would meet the wife's reasonable requirements on the application of the Duxbury tables to the wife's income needs as he defined them. Even circuit judges ticketed for ancillary relief work very seldom try contested ancillary relief cases and such a wide spectrum can hardly have been helpful to the judge. Of course such a spectrum could not result from differences of calculation but only from a fundamental difference of approach. Mr Duckworth for the wife advanced a bold and original case emphasising an entitlement to a share in the proceeds of sale of a family business. He rejected the quantification of his client's claim by reference to reasonable requirements or by capitalising her current income needs by use of the Duxbury tables. He relied upon a written report from an actuary who contended that, if capitalisation were appropriate, it should be done by reference to the Ogden tables rather than by reference to Duxbury. Mr Duckworth was inspired to run that argument as a result of the decision in the appeal of Wells v Wells [1999] 1 AC 345. Mr Hayward-Smith was able to advance his proposed lump sum by commencing with a stringent pruning of the wife's proposed expenditure to a figure of just under £20,000 per annum exclusive of child periodical payments. The trial was further encumbered with a number of issues that with hindsight scarcely merited the prominence that they received. For some reason the husband thought it worth contesting the wife's application for £6,000 per annum per child. However he was perhaps vindicated in that stance by the judge's finding. Equally surprising to me was the wife's application brought under section 24 of the Matrimonial Causes Act 1973 for the variation of the children's settlement to restrict the beneficial class to the two children of the marriage. I cannot see how it could be said that the settlement in question constituted a post-nuptial settlement made upon the parties to the marriage. However since the judge ultimately refused the application in the exercise of his discretion I need say no more. Finally the judge investigated as 'a major factual issue' whether between date of separation and date of trial the wife had borrowed approximately £30,000 from within her own family to sustain her standard of living. In the scale of this case the liability, even if proved, would hardly have affected outcome. However it seems that the issue was fought partly for its impact on credibility and partly for its impact on the wife's budget. The judge's findings on the issue are somewhat inconclusive, although he was critical of the evidence of the wife and her supporting witness. This sense of incomplete or self-cancelling conclusion is a feature of a judgment which plainly strives to be fair to both the spouses and to match every nuance of the case. But where the same issue is addressed at different points within the judgment findings emerge that either counteract each other or are difficult to reconcile the one with the other.
However that is not Mr Pointer's principal criticism. His principal criticism is that this was a conventional case requiring a conventional quantification of a lump sum payment sufficient to enable the judge to order a clean break. The primary tool for quantification was Duxbury. Once the judge determined on the tables a single payment necessary to capitalise the wife's income requirements on an amortised basis he held the opportunity to vary that figure up or down to reflect all the circumstances of the case and in particular the statutory criteria. He submits that such an approach was not only correct but if anything generous to the wife because at the age of 39 she was at the highest on the threshold of entitlement to a Duxbury settlement.
Approaching the detail Mr Pointer criticises the judge for having found a reasonable need for the wife to better her accommodation when she had never mentioned such an aspiration. He further says that once the judge specifically fixed her income bracket by saying that it was in the region of £30,000 to £35,000 the addition of the words 'or more' were either meaningless or hard to construe. Finally he submitted that since the judge had found both that the wife would work and that she would earn approximately £8,000 per annum the subsequent finding that it would not be reasonable to expect her to work was otiose.
Mr Pointer's further submissions were in a sense anticipatory. First he said that Wells v Wells is of no application in ancillary relief proceedings. The victims of tort are in a special category requiring a greater degree of financial security. In support he referred us to an article published in Family Law Journal in December 1998 the authors of which are the acknowledged experts in the field. Finally he approached the issue of the wife's contributions. These he submitted could not possibly account for the judge arriving at a lump sum award of £1.05M, a figure that certainly does not explain itself and which is not specifically explained in the judgment.
In response Mr Duckworth asserted that this was a highly unusual case on its facts where the wife as joint contributor to the successful sale of the family business was plainly entitled to such share as the judge felt fair without any reference to her future income requirements and without any reliance on a preliminary capitalisation of those requirements by the Duxbury method. Alternatively he submits that the judge was entitled to have regard to the wife's contribution not only by her work within the business but also as a wife and mother. He particularly relied upon a passage cited from the judgment of Purchase LJ in the case of Vicary v Vicary [1992] 2 FLR 271. Only if he failed in those submissions did he submit that any capitalisation of the...
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