Thomas v Thomas

JurisdictionEngland & Wales
Judgment Date02 May 1995
Judgment citation (vLex)[1995] EWCA Civ J0502-2
CourtCourt of Appeal (Civil Division)
Docket NumberLTA 94\7240\F
Date02 May 1995
Anthony Bernard Thomas
Kim Patricia Thomas

[1995] EWCA Civ J0502-2

His Honour Judge Heald

Before Lord Justice Glidewell Lord Justice Waite

LTA 94\7240\F




MR P DUCKWORTH (Instructed by Bramleys, Nottingham, NG1 5BH) appeared on behalf of the Appellant.

MR C WOOD (Instructed by Rupert Bear & Co., Nottingham) appeared on behalf of the Respondents.


This appeal arises in a case where the court, in the exercise of its powers to award financial support at divorce for the wife and children of a prosperous business man, faced two difficulties standing in the way of a capital and income award on the scale that would normally have been appropriate for a man of his means and earning capacity. One of them arose from the fact that the husband was a member of Lloyds, required (as a condition of his membership) to provide a Bank guarantee covering his potential liability up to a specified limit. Although his membership was expected to yield profit for the future, he had incurred past losses which he had discharged through a personal loan secured on the family home. In consequence the primary equity in the family home (that is to say the proportion of its value which would normally have been available, after discharging a conventional home loan mortgage, to provide a source of capital for the wife) was committed to the guarantor Bank as security for the contingent liability which would arise by way of indemnity in the event of the guarantee being enforced and for the actual liability which had already been incurred in respect of the Lloyds losses loan. The husband claimed to be unable to offer any alternative security acceptable to the Bank for either of those liabilities. If he was right, the residual equity in the family home after satisfying those charges would have been wholly inadequate to support the re-housing needs of the wife and children. The second difficulty arose from the restraints imposed upon the husband's primary source of immediate income —the family business of which he was joint managing director —resulting from the pursuit by that company of a policy of ploughing back profits and paying relatively modest salaries to the directors, while at the same time making very generous provision for them by way of pension contributions.


In the Nottingham County Court on 1st November 1994 His Honour Judge Heald dealt with those difficulties firmly. He held, firstly, that the husband had failed to satisfy him that it was beyond his power or means to free the primary equity in the family home by providing the Bank with alternative security for the guarantee and for the Lloyds losses loan. He accordingly made a lump sum order in favour of the wife in an amount representing the bulk (though not quite the whole) of the primary equity in the family home. Secondly, in regard to income, he made an order for payment to the wife of periodic maintenance for the children at a figure which left the husband facing a deficiency of income after meeting expenses which included the cost of educating the children at private schools —the view being expressed by the judge that the deficiency was one which the husband could and should make good by procuring changes by the company in its policy towards the payment of dividends and/or the remuneration of its management. The husband now appeals against that order, claiming that it exceeded the proper bounds of discretion within which the court normally acts when exercising its matrimonial jurisdiction —wide though he acknowledges that discretion to be.




The discretionary powers conferred on the court by the amended sections 23 to 25A of the Matrimonial Causes Act 1973 to re-distribute the assets of spouses are almost limitless. That represents an acknowledgment by Parliament that if justice is to be achieved between spouses at divorce the court must be equipped, in a society where the forms of wealth-holding are diverse and often sophisticated, to penetrate outer forms and get to the heart of ownership. For their part, the judges who administer this jurisdiction have traditionally accepted the Shakespearean principle that "it is excellent to have a giant's strength but tyrannous to use it like a giant". The precise boundaries of that judicial self-restraint have never been rigidly defined —nor could they be, if the jurisdiction is to retain its flexibility. But certain principles emerge from the authorities. One is that the court is not obliged to limit its orders exclusively to resources of capital or income which are shown actually to exist. The availability of unidentified resources may, for example, be inferred from a spouses's expenditure or style of living, or from his inability or unwillingness to allow the complexity of his affairs to be penetrated with the precision necessary to ascertain his actual wealth or the degree of liquidity of his assets. Another is that where a spouse enjoys access to wealth but no absolute entitlement to it (as in the case, for example, of a beneficiary under a discretionary trust or someone who is dependent on the generosity of a relative), the court will not act in direct invasion of the rights of, or usurp the discretion exercisable by, a third party. Nor will it put upon a third party undue pressure to act in a way which will enhance the means of the maintaining spouse. This does not however mean that the court acts in total disregard of the potential availability of wealth from sources owned or administered by others. There will be occasions when it becomes permissible for a judge deliberately to frame his orders in a form which affords judicious encouragement to third parties to provide the maintaining spouse with the means to comply with the court's view of the justice of the case. There are bound to be instances where the boundary between improper pressure and judicious encouragement proves to be a fine one, and it will require attention to the particular circumstances of each case to see whether it has been crossed.


Those, in summary, are the principles which are in my view to be deduced from the authorities to which Mr Duckworth (for the husband) and Mr Wood (for the wife) referred us in the course of their clear and able submissions —namely Howard v Howard [1945] P 1, Donaldson v Donaldson 1958 1 WLR 827, J-PC v J-AF 1955 P 215 per Sachs LJ at p 227, O'D v O'D 1976 Fam 83, B v B [1982] 3 FLR 296, Nicholas v Nicholas [1984] 5 FLR 285, Browne v Browne [1989] 1 FLR 291, Crittenden v Crittenden [1990] 2 FLR 361, Green v Green [1993] 1 FLR 326, and H v H (Capital Provision) [1993] 2 FLR 335.




The husband and wife are now aged 43 and 34. They were married on 23rd August 1980 and their two sons were born in November 1982 and June 1985 and are now 12 and 9. There is a firm intention that both boys should continue to receive private day school education at a cost which runs at present at £6000 per annum for each of them. The husband has at all material times worked for the family car sales company, founded by his father and uncle, of which he is now joint managing director with his brother. The company has enjoyed since the 1950s the exclusive county franchise for sales of Mercedes cars and is accepted to be a successful concern. In 1985 the family home Mill Farm Long Clawson was purchased in the name of the husband. During that same year he became a name at Lloyds. There were differences between the spouses in 1989 which led to a temporary separation. In November 1992 they separated permanently, after the wife had become attached to a man whom she still sees but with whom she does not live.




The wife has no significant capital. The Husband's resources are:


Family Home




Insurance Policies




Cash (Lloyds reserve)




Securities (Lloyds reserve)




Pension Funds (estimated value at age 60 —£1.3 to £2.8 million) current fund value




25.2% shareholding in the company (minimum)




Interest under policies written on life of his





His liabilities are:


Mortgage to Midland Bank




Lloyds Losses Loan from Midland Bank




Liability to Midland Bank under his indemnity supporting the Bank's guarantee to Lloyds




Personal overdraft



The first three of those liabilities are secured on the family home. The mortgage is a home loan in the conventional sense: the second and third are existing and contingent liabilities linked with the Husband's membership of Lloyds.



His membership of Lloyds does not at present yield income, but it was held by the judge to be soundly based and likely to become income-producing in due course. He has one potential loss through a doubtful syndicate where the maximum liability is £100,000 secured by the guarantee. The Midland Bank has stated that it is not prepared to allow the indemnity liability under that guarantee to become unsecured, and there was in evidence before the judge a letter from the Bank stating that for four years the Bank would, if no alternative security was provided, require the existing charge on the family home to be maintained or to be replaced with cash cover paid out of the proceeds of its sale.

His earnings from the company (following a recent 10% increase in his salary) yield £2791 net per month. He is also in receipt of school fees policy income of £172 per month.

B. THE...

To continue reading

Request your trial
82 cases
  • C v C (Ancillary Relief: Trust Fund)
    • United Kingdom
    • Family Division
    • 25 June 2009
    ...have to take the widow as they find her. As against the widow there can be no question of exerting any “judicious encouragement” (see Thomas v Thomas [1995] 2 FLR 668 at page 670), as there might be if what was in issue was the exercise by the trustees of their powers if they had any that w......
  • Villiers v Villiers
    • United Kingdom
    • Family Court
    • 1 January 2021
  • Elizabeth Tchenquiz-Imerman v Vivian Saul Imerman
    • United Kingdom
    • Family Division
    • 22 November 2013
    ...with the means to comply with the court's view of the justice of the case … The cases do not say what amounts to 'undue pressure'. But in Thomas Glidewell LJ said what would not be undue pressure (viz. if (a) the interests of other beneficiaries would not be appreciably damaged and (b) the ......
  • B v B (Ancillary Relief)
    • United Kingdom
    • Family Division
    • 19 June 2009
    ...I would hope they would decide that it is not. 78 Counsel have referred me to a number of authorities, but I propose only to refer to Thomas v. Thomas [1995] 2 FLR 668 and Charman v. Charman [2006] 2 FLR 422. In Thomas v. Thomas, p. 678, Glidewell LJ identified a number of broad principles ......
  • Request a trial to view additional results
2 firm's commentaries
  • Is It An Offshore Sham? A Balanced Perspective Is Welcomed
    • Cayman Islands
    • Mondaq Cayman Islands
    • 25 January 2009
    ...that the shares held by the trusts should be treated as available to the husband in accordance with the principle in Thomas v Thomas [1995] 2 FLR 668. There were allegations befitting of the War of the Roses that helped to allow the trial to drag on from its start in December 2005 to its en......
  • A Family Affair
    • United Kingdom
    • Mondaq UK
    • 10 October 2016
    ...that they will be received in the foreseeable future. The court looks at the reality of the situation. For example, in Thomas v Thomas [1995] 2 FLR 668, the husband had trust assets which were not readily available to him, but they were still considered to be a substantial financial resourc......
3 books & journal articles
  • Table of Cases
    • Bermuda
    • Wildy Simmonds & Hill Offshore Commercial Law in Bermuda - 2nd Edition Preliminary Sections
    • 30 August 2018
    ...Swan v Fort Knox Bermuda Ltd [2014] Bda LR 14, Sup Ct of Bermuda 8.84 Thomas v HW Thomas Ltd [1984] 1 NZLR 686 (CA) 8.85 Thomas v Thomas [1995] 2 FLR 668, [1996] 2 FCR 544, [1995] Fam Law 672, CA 14.29 Thyssen-Bornemisza v Thyssen-Bornemisza [1988] Bda LR 11; [1999] Bda LR 14; [2000] Bda LR......
  • Trust Litigation in Bermuda
    • Bermuda
    • Wildy Simmonds & Hill Offshore Commercial Law in Bermuda - 2nd Edition Part III. Commercial dispute resolution
    • 30 August 2018
    ...2 QB 786. 22 The sham trust argument was briefly raised but rejected in Araujo v Araujo [2008] Bda LR 8, para 47. 23 Thomas v Thomas [1995] 2 FLR 668 was relied upon in Humphrey v Humphrey [2008] Bda LR 46 as support for a wider principle relating to any third party who provides financial s......
  • Should have put a Ring on it?' A Comparative Analysis of the Law of Cohabitation in Ireland, Scotland and England and Wales
    • Ireland
    • Hibernian Law Journal No. 11-2012, January 2012
    • 1 January 2012
    ...whether the applicant has suffered economic 125 White v White [2001] A.C. 596. See LC Report p.69, para.4.5 126 Thomas v Thomas [1995] 2 F.L.R. 668 at 670D 127 Miller v Miller [2006] U.K.H.L. 24, McFarlane v McFarlane [2006] 2 A.C. 618 128 Section 21(1) of the Matrimonial Causes Act 1973 12......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT