A v A (Duxbury calculations)
| Jurisdiction | England & Wales |
| Judgment Date | 1999 |
| Date | 1999 |
| Year | 1999 |
| Court | Family Division |
Financial provision – Divorce – Duxbury calculations – Lump sum order – Parties of advanced age – Large imbalance in respective financial positions – Whether Duxbury calculation appropriate to ascertain income-producing fund – Relevance of length of marriage together with spouse’s full entitlement and advanced age – Whether appropriate to evaluate claimant’s reasonable requirements.
The husband and wife were married in 1955. At the time of their divorce in 1997 they were aged 79 and 76 respectively. The husband applied for financial provision. At a hearing in 1998 a deputy district judge found that throughout the marriage both parties had made full contribution to the marriage both financially and in other ways. However, by 1997, as a result of the success of the wife’s business, her assets totalled £1.034m of which £750,000 was on deposit in banks and building societies, whereas the husband’s assets amounted to £61,000 of which £13,000 was allocated as the value of chattels and £12,000 as the value of an insurance policy. The wife had a gross income of around £169,000 whereas that of the husband was £6,411. The district judge ordered that the wife should pay the husband a lump sum of £389,000. That would, together with the husband’s assets of £61,000, provide him with total resources of £450,000. The lump sum included an amount for him to rehouse himself when he moved out of the matrimonial home and an income-producing fund of £250,000 to provide an income of £16,000 a year whilst retaining the fund intact. The wife appealed contending that an income of £16,000 a year could be met, having regard to the husband’s age, by a quasi-Duxbury fund of £87,000 rather than £250,000, and thus the lump sum award should have been about £226,000.
Held – The district judge’s calculation of the income-producing fund was contrary to established principle as it had assumed that the whole of the £250,000 was available to produce an income; that the attributable income was 5% gross; that one should ignore future inflation and any taxation changes; and that the husband would continue to live at the rate of £16,000 net whilst retaining the fund intact. Accordingly, the district judge’s reasoning was not sustainable and the court would exercise its own discretion. In light of the husband’s advanced age, there was a real and significant chance of him living longer than the life expectancy tables used in the Duxbury calculation, which simply predicted the average period for which the whole group of those of a given age would survive but could not foretell any particular individual’s human life span. It followed that a Duxbury calculation did not assist at all on the facts of the present case. Instead, having regard to the husband’s age, the length of the marriage and the extent of his contributions, the
correct approach was that the husband was entitled to recognition in money terms of his significant contribution to the lengthy marriage. The appropriate order, applying the criteria of s 25 of the Matrimonial Causes Act 1973, would disregard the husband’s assets of £61,000 in view of the imbalance between the parties’ respective financial positions and would require the wife to pay a lump sum of £350,000 of which £150,000 was to meet the husband’s reasonable requirements after he had rehoused himself. The appeal would be allowed to that extent.
Cases referred to in judgmentBellenden (formerly Satterthwaite) v Satterthwaite [1948] 1 All ER 343, CA.
Dart v Dart[1997] 1 FCR 21, CA.
Duxbury v Duxbury [1992] Fam 62n, [1990] 2 All ER 77, [1991] 3 WLR 639n, CA.
Page v Page (1981) 2 FLR 199.
Piglowska v Piglowski[1999] 2 FCR 481, [1999] 3 All ER 632, [1999] 1 WLR 1360, HL.
Preston v Preston [1982] Fam 17, [1982] 1 All ER 41, [1981] 3 WLR 619, CA.
Smith (decd), Re, Smith v Smith [1991] FCR 791; sub nom Smith v Smith (Smith intervening) [1992] Fam 69, [1991] 2 All ER 306, [1991] 3 WLR 646, CA.
W v W (financial provision) [1996] 3 FCR 641.
White v White[1998] 3 FCR 45, CA.
AppealThe wife appealed from a decision of Deputy District Judge Nathan ordering her to pay to the husband a lump sum of £389,000 which included £250,000 to provide an income-producing fund for her husband who was aged 79, an amount which the wife claimed was excessive. The facts are set out in the judgment of Singer J.
Richard Tyson (instructed by Julia Frimond, Guildford) for the wife.
Valentine Le Grice (instructed by Charles Russell, Guildford) for the husband.
Cur adv vult
9 September 1999. The following judgment was handed down.
SINGER J.The financial issues which arose upon the divorce of Mr and Mrs A (to whom notwithstanding that divorce I shall for simplicity refer as the husband and the wife) were the subject-matter of evidence and argument before Deputy District Judge Nathan over three days last year, after which he gave his reserved judgment on 10 September 1998. His order was based upon the premise that the husband would move out of the jointly-owned home in Guildford to alternative accommodation to be acquired by him with the use of the total resources of £450,000 which he would have as the aggregate of the district judge’s £389,000 lump sum award and the £61,000 he already owned. In return his interest in the Guildford house, which house was valued at £250,000 and was free of mortgage, should be transferred to the wife. These orders were upon a clean break basis not only so far as further applications during joint lives were concerned, but also in respect of any potential application by either party under the Inheritance (Provision
for Family and Dependants) Act 1975. In addition, the wife was ordered to pay the husband’s costs to be taxed upon the standard basis if not agreed.
Against that order the wife appealed. The order was stayed upon terms which enabled the parties to put their physical separation into effect. The wife paid the husband £250,000, he transferred the former matrimonial home to her sole name, and he purchased and last autumn moved into a flat in Hampstead, as had been envisaged.
At the time that he left he removed a quantity of the chattels from the Guildford home without, as it had been agreed he should, agreeing their division with the wife. In the event (and possibly motivated by practical considerations relating to the cost of pursuing this issue), the wife sought the return of only a modest proportion of what was removed. Nevertheless, her notice of appeal was amended to include the suggestion that the husband’s behaviour in this regard constituted conduct which it would be inequitable for me to disregard in the context of this appeal. I am quite unable so to regard it. I therefore say no more upon that topic.
The wife is dissatisfied with the decision that she should pay as much as £389,000 to the husband. She would have preferred him to have less than £200,000 to rehouse himself. But the thrust of her appeal relates to the district judge’s decision that (in addition to that rehousing requirement which he assessed in that sum of £200,000) the balance of the lump sum should enable the husband to have an income-producing fund of £250,000. It is suggested to me on behalf of the wife by her counsel, Mr Tyson, that his income requirement, which he says was generously assessed at £16,000 per annum net, could be met amply by a quasi-Duxbury fund of about £87,000 rather than £250,000: and thus that (having put his existing £61,000 towards it) the lump sum award should have been about £226,000 rather than £389,000, a difference of £163,000.
As it happens, and on the basis of what were in effect agreed valuations, the wife upon the district judge’s order is left with £900,000, and thus that order produces a one-third/two-thirds split in her favour. Whereas her current proposal would leave him with £287,000 and her with £1,063,000, a split of about one-fifth to him and four-fifths to her. In addition, as against his budget of £16,000 net, the wife’s net income from her pension in payment and investment income (assuming that she ceases to receive earned income) would be at least double that amount.
In final submissions before the district judge the wife had indeed contended that the husband should be left with even less than was suggested as fair to me. Her submission then was that his overall needs would be met if left with capital (including his existing £61,000) of between £150,000 and £250,000, depending upon whether he should live in Guildford (as she said would be best for him) or near to one of the parties’ daughters (as he wished to be able to do) in Hampstead. Thus she maintained that he might receive in all as little as one-ninth of the available assets. Of this range of outcome the district judge said that in the context of this marriage that would be an unjust result.
I should stress that he also cautioned himself that these cases are not to be decided by reference to percentages, as do I. They are however a useful check upon the figure at which one otherwise arrives in applying s 25 of the Matrimonial Causes Act 1973, which (together with its judicial interpretation through decided
cases) specifies what factors are to be taken into account, albeit not what objective is to be achieved. Given the absence, since the 1984 amendments to the statute, of a specified objective, I feel it fair to observe that I too would prefer that the law should produce a judicial response which the judge concerned would not need to castigate as unjust.
Each case must be set against its factual background, and thus I turn to that which here applies.
The husband is 79 and the wife 76. Their age is clearly a material factor, as is the length of their marriage which took place in 1955. Although they in fact have only lived in separate homes since last autumn, they had progressively drifted emotionally apart and the husband had over the years been increasingly reclusive. They have two daughters in their 30s.
For the husband this was a second marriage...
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