Gojkovic v Gojkovic (No. 2)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE BUTLER-SLOSS,LORD JUSTICE RUSSELL,LORD JUSTICE WOOLF
Judgment Date30 April 1991
Neutral Citation[1989] EWCA Civ J1012-8
Judgment citation (vLex)[1991] EWCA Civ J0430-5
Docket Number91/0434,89/0964

[1989] EWCA Civ J1012-8

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

FAMILY DIVISION

(MR. JUSTICE WARD)

Royal Courts of Justice,

Before:

Lord Justice Woolf

Lord Justice Russell

and

Lord Justice Butler-Sloss

89/0964

No. 4843/1986

Radojka Gojkovic
Petitioner (Respondent)
and
Risto Gojkovic
Respondent (Appellant)

MR. NICHOLAS WALL Q.C. and MISS JUDITH HUGHES (instructed by Messrs. Hamlin Slowe, London, W1) appeared on behalf of the Apppellant (Respondent).

MR. BRUCE BLAIR Q.C. (instructed by Messrs. Michael Freeman & Co., London, W1) appeared on behalf of the Respondent (Petitioner).

LORD JUSTICE BUTLER-SLOSS
1

This is an appeal by a husband from the order of Ward J. made on Friday, 17th February, 1989. There was an application by the former wife for ancillary relief under sections 23 and 25 of the Matrimonial Causes Act 1973, as amended. This is what has been described as a "big money"case. The assets of the parties amount to approximately _4 million and the effect of the order of the learned judge was to provide the former wife with a maisonette worth _295,000 and a lump sum of _1 million. It is a most unusual case and has, in my judgment, features that are exceptional.

2

The former husband is about 45 years old and the former wife 49 years old. Although they married on 15th November 1978, the judge found that they met and began to cohabit in 1969. There are no children of the family. The marriage became unhappy; the wife presented a petition for divorce in 1986 and a decree nisi was granted on 12th February 1987.

3

The judge described the period of their married life together in these terms:

"This is a story of high achievement and, many would think, glorious success. That success came through unrelenting hard work, unlimited self-sacrifice and absolute determination. Beside personal ambition, the driving force for her was love, and for him a sense of family responsibility."

4

The husband, who is a Yugoslav, arrived in England in 1966 at the age of 23 with a small sum of money in his pocket and worked his way up from kitchen porter, assistant cook, employment at a casino and by painting and decorating. The former wife, also Yugoslav, also came to England in 1966 where she took menial positions in a hospital and as a waitress. They met in 1968 and thereafter in 1969 made their life together.

5

The learned judge set out in some detail, since it was in dispute, the way in which the wealth of the family was created. He made certain findings of fact which, apart from the extent of the wife's contribution, were not challenged. The couple started by working on a property while they were carrying on other employment, and then turning that property into hotel accommodation. It is agreed that the wife was the chatelaine par excellence. The husband's brothers became involved in enterprises with the husband, and their business expanded into other hotels and in due course in other properties. Other members of the family also became involved in the businesses. The wife spent her time in the running of the hotels, whereas in the later years the husband and his brothers devoted their skills to property speculation with considerable success. By the time of the parting in 1986 the assets of the family were considerable, and the agreed figure for the purposes of the hearing was that the husband's share was approximately _4 million. The wife's legal interest in the properties of the family was very small.

6

The judge said:

"…. I find the petitioner's contribution to be exceptional by ordinary standards, if not exceptional as measured against the respondent's. In terms of doing what is expected of them I find they performed equally."

7

He found that there was between them a quasi partnership.

"…. bearing all the hallmarks of joint effort and none of the features of employment…. Moreover it was a contribution to the enduring success of the enterprise….. I find…. that the petitioner played a unique role in establishing a supply of custom to the hotel. Her efforts helped build up and sustain the business. This success would not have come without it."

8

The judge said further:

"Having regard to all the evidence, I find that by her great contribution the petitioner has earned a share of the assets that have been produced. I must take this into account when assessing the final award."

9

Prior to the hearing before the judge, the husband, through his legal advisers, made an open offer based upon calculations provided by the accountants Cooper and Lybrand. That open offer was that the wife should receive a maisonette worth 295,000, about which there is no dispute, and that she should receive a lump sum of 532,000. That figure was carefully calculated in accordance with what has been called the "Duxbury principles"or "Duxbury calculations", to which I will refer in more detail in a moment. The difference between the award of the judge and the offer of the husband is therefore approximately half a million pounds. It was agreed between the parties that this was a suitable case for a "clean break"order.

10

This court has been urged to provide guidelines as to the correct approach to big money cases. Our attention has been drawn to the two cases of Preston v. Preston [1982] Fam 17 and Duxbury v. Duxbury [1987] FLR 7. In Preston the judge accepted that _500,000 was required to provide the wife with a net income after tax of _20,000 a year. In Duxbury the figure of 20,000 net income for the wife of a rich man in 1980 was accepted in principle by the legal advisers as an appropriate sum and was adjusted to the 1985 figure of _28,000. On that basis, and with the assistance of detailed figures, the judge in Duxbury arrived at the lump sum award of _540,000 to meet in full the wife's entitlement and reasonable requirements. The lack in Preston of detailed information as to the financial implications of a lump sum awarded to provide income, criticised by Ormrod L.J., was remedied in Duxbury, and the computerised formulation accepted by the judge in that case has provided, we are told, a very useful guide to the settlement of cases in this bracket in the last two years. Both in Preston and in Duxbury, this court upheld the lump sum orders without being asked to consider in any detail the level of income appropriate in such cases. Moreover, I do not read those decisions of this court as laying down an income bracket suitable for the needs of every former wife of a millionaire. In Preston, where the wife made a substantial financial contribution during the early part of the marriage which subsisted for 24 years, and in Duxbury, where the wife did not go out to work but brought up the family and did all that was required of her as a wife, the formulation arrived at by the accountants may provide a most helpful guide to the assessment of the needs or reasonable requirements of a wife where the husband is wealthy, taking into account the contribution which she has made to the family and the marriage. It can only, however, be a guide and should not be elevated to a rigid mathematical calculation. Each case must be decided on its own facts and in accordance with the principles set out in section 25 the Matrimonial Causes Act 1973 (as amended in 1984). The wide discretion of the court under section 25 must not be fettered.

11

Mr. Wall, on behalf of the applellant, in his attractive argument urges us to treat the present appeal as a Duxbury type of case. He makes two main points:

(i) that the judge was wrong in priciple to make an award to enable the wife to buy and run a hotel; and

(ii) if not wrong in principle, the amount was excessive, and he erred in the exercise of his discretion in making so large an award.

12

In considering (i) he argued that the effect of the repeal and re-enactment of section 25 of the 1973 Act as amended by the Matrimonial and Family Proceedings Act 1984, section 3, had the effect of limiting the discretion of the court under the new section 25 to providing for the wife to become self-sufficient. Considerations of the future standard of living of the former spouse were irrelevant, although he accepted that the contribution of the applicant spouse during the marriage would affect or enhance her subsequent standard of living after divorce.

13

For my part, I do not see the repeal and replacement of section 25 as having that effect. By the original section 25 (1) it was the duty of the court, in deciding whether to excercise its powers under section 23 or section 24, to have regard to all the circumstances of the case, including seven specific matters:

"and so to exercise those powers 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."

14

That section has not been repealed. It has been replaced by section 25 (1) and (2), which set out that the court must have regard to all the circumstances, and lists eight specific matters to which the court shall have regard. It no longer requires the court to attempt that which was impossible in the vast majority of cases. It does not, however, in my view circumscribe the discretion of the court, as is suggested by Mr. Wall. The new section 25A lays a responsibility upon the court to consider whether financial obligations should be terminated and to make orders designed to enable the spouse to adjust without due hardship to the termination of financial dependance on the other spouse. By section 25 (1) (a) an applicant's future earning...

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