Lambert v Lambert

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date14 Nov 2002
Neutral Citation[2002] EWCA Civ 1685
Docket NumberB1/2001/2504

[2002] EWCA Civ 1685

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE – FAMILY DIVISION

(MR JUSTICE CONNELL)

Royal Courts of Justice

Strand

London WC2A 2LL

Before

Lord Justice Thorpe

Lord Justice May and

Mr Justice Bodey

B1/2001/2504

Between
Shan Elizabeth Rose Lambert
Appellant
and
Harry Paul Lambert
Respondent

NICHOLAS MOSTYN QC & RICHARD TODD (instructed by Messrs Schillings of London W1D 3TL) appeared for the appellant

MARTIN POINTER QC & NIGEL DYER (instructed by Messrs Manches & Co of London WC2B 4RP) appeared for the respondent

THORPE LJ:

Introduction

1

This is an appeal from the judgment of Connell J dated 22 October 2001. He conducted the trial of the ancillary relief proceedings brought by Shan Lambert against her husband Harry Lambert for eight days between 2 and 10 October. The judgment that he gave some twelve days later was reserved and handed down. Permission to appeal was given by me on paper on 5 December 2001, the application having been lodged with this court on 16 November following refusal by Connell J on 31 October. An interval of ten months between grant of permission and listing of the appeal is most unusual and in many ways undesirable. The skeleton arguments of the appellant and respondent were settled on 14 November 2001 and 17 May 2002 respectively. In the year between trial and listing of the appeal there have been a number of significant decisions both here and abroad in a fluid area of the law. Accordingly the skeletons were but scant guide to the oral submissions. Such a delay is above all undesirable for the parties. Until the litigation is concluded it is difficult for them to complete the transition from married life to independent life either financially or emotionally.

2

The case would be very suitable for use in a textbook on ancillary relief. It is a big money case, and the family fortune, taken by the judge to be £20.2M, was all generated during the marriage. Both husband and wife worked hard for their success. There are two children now grown up and independently rich as a consequence of the diversion of a substantial proportion of the family fortune into a trust for their benefit. There are no complicating factors. Following a take-over of the husband's company after the separation the family fortune is more or less all liquid. The wife has always contended for an equal division. The husband offered her only 30% on the grounds that his special contribution entitled him to the lion's share.

The Shape of the Judgment of Connell J

3

Having introduced the parties as being then aged respectively 49 (the applicant wife) and 57 (the respondent husband), Connell J summarised the essential history with admirable brevity as follows:

"2. The marriage lasted 23 years. There are two children, a son aged 20 and a daughter aged nearly 19. Both are at university and are wealthy as a result of a trust which was created for them by their parents in 1985 and which is based in Guernsey. The value of the trust assets is now £7.3M and both children in reality are financially independent.

3. The parties' significant wealth arises from the sale of the shares in the company Adscene Ltd in September 1999 for £75M. Of this sum the husband received £19,726,000, the wife received £500,000, and the children's trust received £6M. This company had been floated on the stock exchange in 1987, and the quoted share price at the time of the sale was 155p. However the price paid for the shares after negotiation conducted by the husband and the board of directors was 263p. Adscene was a company founded by the husband in March 1973, 9 months before he met the wife and 15 months before he married her on 20 June 1974. Adscene produced and distributed a free local newspaper funded by advertising revenue, and it expanded dramatically over the course of the marriage until it was sold as described."

4

In paragraphs 4 and 5 the judge recorded the principal area of factual dispute between the parties. The husband's case was that he had launched the company and set it on a successful path prior to the marriage, and that its success during the marriage was the result of his drive and initiative. After the separation he contended that the eventual sale was at an outstanding price achieved by his special negotiating skills. He asserted that his wife's involvement in the company was more or less ornamental.

5

By contrast the wife claimed for herself not only a committed contribution as wife and mother but also a contribution to the success of the business which she asserted was pivotal. The judge then recorded Mr Pointer QC's submission that, on the husband's case, his contribution to the creation of the family fortune was exceptional, as defined by this court in Cowan v Cowan [2001] EWCA Civ 679, [2002] Fam 97, and that it significantly outweighed the admittedly full but domestic contribution of the wife.

6

In paragraph 6 the judge directed himself as to the law, impeccably in my opinion. He said:

"The court's fundamental duty however remains to apply section 25 of the Matrimonial Causes Act 1973 to all the circumstances of this case in its attempt to arrive at a fair outcome. Although the issue of the parties contributions to the welfare of the family has been uppermost in the minds of the parties and of their representatives, I observe that that issue can claim no statutory priority in the discretionary exercise. I must have regard to each of the eight matters separately specified in section 25(2) against the background of all the circumstances of the case. Since each of the children is now adult and wealthy as described, their welfare no longer requires 'first consideration'."

7

The judge then carried out the section 25 exercise considering in turn each of the section 25(2) criteria. That exercise took him from paragraph 7 to paragraph 28. Between paragraphs 29 and 38 he reviewed those passages in White v White [2001] 1 AC 596 and Cowan v Cowan of particular application to the case. Finally in paragraphs 39 and 40 he expressed his conclusion, namely a 63%: 37% split in favour of the husband. That left the wife with assets totalling £7.5M, nearer the figure of £6M for which Mr Pointer QC had contended than the figure of £10.2M for which Mr Mostyn QC had striven. The order was summarised thus in the final paragraph, paragraph 41:

"Ringleton Manor worth £1.6M will be transferred to the wife. She has other assets worth £2.8M in round figures. I shall in addition order a lump sum payment in full and final satisfaction of all her claims of £3.1M."

The Grounds of Appeal

8

In his grounds of appeal Mr Mostyn QC attacks the judgment on three fronts:

i) First he contends that Connell J fell into the trap of gender discrimination by concluding that the husband's contribution as a money maker was special, of greater value than the wife's, and a justification for an unequal division of the family fortune.

ii) Second he submits that the husband held the proceeds of sale of his shares in the company as trustee pending the outcome of the wife's ancillary relief claims. His subsequent investments were reckless and the wife's entitlement should have been determined on the notional basis that the assets retained the value that they held immediately after the sale of the business.

iii) Third he says that the judgment focussed insufficiently on the wife's needs as the future owner of the final matrimonial home, with the consequence that the yield from her investment capital would not meet her outgoings.

9

This appeal was dominated by the first ground, which raises many difficult questions and requires a review of recent authorities both here and abroad. The submission underlying the second ground had been rejected by Connell J on the facts and particularly on his assessment of the husband's good faith. Before us when Mr Mostyn saw that the wind was against him he tacitly abandoned this ground. The third ground requires no consideration of law and principle. It is fact dependent and focuses on a single paragraph in the judgment below. I will defer any consideration of ground three until I have dealt with the first ground.

Connell J's Treatment of Contributions

10

How then did Connell J deal with contributions? It is perhaps indicative that the section of his judgment devoted to contributions is the longest. He considered the wife's contribution, dealing first with home life. He said this:

"The wife's contribution as wife and mother is accepted by the husband. Given that this was a husband who was intent on building up Adscene, who worked long hours to that end and who, on his own account, was often away from home for much of the working week, the contribution made by the wife in this regard was particularly valuable. The husband's contribution vis-a-vis home life and his children was primarily confined to weekends; so that he was a committed but frequently absent husband and father. When home he made the major decisions on modernisation and the wife did her best to implement these when he was away."

He noted that for at least the first five years of the marriage the wife ran her own business which enabled her to pay for the food and other domestic articles. "This was a constructive contribution in the early days of the marriage and in my view is evidence of the unsurprising fact that the parties treated the marriage as a partnership from an early stage."

11

He put the wife's contribution to Adscene into proper perspective, thus:

"I do not see her role as pivotal. On the other hand it would not be fair to her to describe it as purely incidental, since the husband was able to turn to her for...

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