O'Neill v O'Neill
| Jurisdiction | England & Wales |
| Judgment Date | 1975 |
| Date | 1975 |
| Year | 1975 |
| Court | Court of Appeal (Civil Division) |
CUMMING-BRUCE, LJ AND SIR DAVID CAIRNS
Financial provision – spouses with substantial financial resources – wife's application for financial provision – Judge finding a need for a lump sum – whether proper to order a further sum to give wife an additional capital resource.
Following the breakdown of the marriage, the wife applied for financial provision. The husband was a man of substantial financial resources and during the marriage he had arranged for the transfer to the wife of large sums of money. As a result, by the time of the breakdown of the marriage, the wife had substantial capital with an income potential of £34,000 a year. The matter came before Sir John Arnold, P who found that it was impractical for the wife to remain in the matrimonial home because of the outgoings required. It was necessary, therefore, for the wife to acquire alternative accommodation. The President decided that a reasonable requirement for the wife was accommodation costing £180,000 with an additional sum of £20,000 to establish herself in her new home. The President went on to hold that the wife should have an additional capital resource which he put at £50,000.
The husband appealed.
Held – allowing the appeal: The President was entitled to find that the wife's reasonable requirement for accommodation justified an order that the husband pay a lump sum of £200,000. However, having regard to the capital resources of the wife and her opportunity to organize that capital according to her needs from time to time, there was nothing to justify the additional £50,000 ordered by the President. The order would be varied by reducing the lump sum payable to the wife by £50,000.
Cases referred to in judgment:Hudson v Hudson (1980) 10 Fam Law 23.
O'D v O'D [1976] Fam 83; [1975] 3 WLR 308, sub nom O'Donnell v O'Donnell [1975] 2 All ER 993.
Page v Page (1981) 2 FLR 198.
Preston v Preston [1982] Fam 17; [1981] 3 WLR 619; [1982] 1 All ER 41.
S v S (unreported) 16 July 1980.
Slater v Slater (1982) 3 FLR 364.
Joseph Jackson, QC and Peter Singer for the husband.
Matthew Thorpe, QC and Michael Horowitz for the wife.
LORD JUSTICE CUMMING-BRUCE.This is an appeal pursuant to the leave of the President against orders that he made upon the application of the wife for financial provision following the breakdown of her marriage. It is a case in which the husband has substantial financial resources and during the marriage he arranged for the transfer to his wife of substantial sums of money such that, by the date of the breakdown of the marriage, she herself had a substantial sum of capital of the order of $460,000. It is useful, in my view, to begin by reminding myself of the guidance given in cases where the resources are great.
In O'D v O'D [1976] Fam 83 at p 90 Ormrod, LJ, delivering the judgment of the court, made these observations:
"In approaching a case like the present, the first stage should be to make as reliable an estimate as possible of the husband's current financial position and future prospects. In making this assessment the court is concerned with the reality of the husband's resources, using that word in a broad sense to include not only what he is shown to have, but also what could reasonably be made available to him if he so wished ...
The next stage is to consider the wife's position, not from the narrow point of `need', but to ascertain her reasonable requirements, bearing in mind that she will have to provide an appropriate home and background for herself and the children. Her first requirement is a house ...
Her next requirement, to comply with the terms of the concluding part of s.25, which requires the court to make such order as in all the circumstances is just, is a reasonable capital sum. In a case such as this it is probably better to regard this not so much as her share, but as one of the necessary factors in the attempt to put her in the position she would have been in had the marriage continued."
At p 92 Ormrod, LJ concluded:
"The court must, of course, consider very carefully the effect on the husband of any order which it has in mind to make, because its purpose is to do justice to both parties, and the section specifically requires the court to have regard to what is `practicable'. But in considering this aspect of the case the court
is entitled to look at all the surrounding circumstances with a realistic eye."
In Preston v Preston [1982] Fam 17, at p 24 Ormrod, LJ referred to the three cases which at that time were the only cases involving very large sums of money which had reached the Court of Appeal: O'D v O'D, Page v Page and S v S. Ormrod, LJ went on to say:
"Although the decision in each of those cases depended largely on its individual circumstances, some general propositions can be extracted from them. In the first place the court should approach the problem by following the directions set out in s.25(1), i.e. by considering all the circumstances of the case and, in particular, the factors set out, seriatim in paras.(a) to (g) before deciding on the order which will most nearly satisfy the objective set by Parliament, namely:
`... to place the parties, so far as 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.'
It is, therefore, wrong in principle to adopt a purely arithmetical approach by considering what proportion of the total assets should be allocated to the wife. The judgments in all three of the cases are agreed on this point. The suggestion in Wachtel ... of one half or one third of the total assets is, therefore, no more than a guideline, though it may be a useful check on the tentative figure which emerges from working through the consideration set out in the section."
Earlier in the judgment, again on p 24, Ormrod, LJ had said that in most cases "the resources available to the parties impose their own constraint on the exercise of the court's discretion" because "they are insufficient to meet the reasonable needs of both parties after the separation. "In others, where the resources are larger, the practicality of realizing assets, without destroying or seriously damaging a husband's business, imposes another constraint. It is only in the rare case where the assets are very large and there is no serious liquidity problem, that it becomes necessary to consider the ultimate limits of the court's discretionary powers under this section." One notes from the report of the case that the majority took the view that, though the sum ordered of £600,000 was very high and higher probably than...
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