Wagstaff v Wagstaff
| Jurisdiction | England & Wales |
| Judgment Date | 19 November 1991 |
| Court | Court of Appeal (Civil Division) |
LORD DONALDSON OF LYMINGTON, MR AND BUTLER-SLOSS, LJ
Financial provision – calculations to be based on current position as to capital resources – existence of capital sums at an earlier period possibly relevant as to party's behaviour and division of remaining capital.
Financial provision – lump sum – effect of costs – court to be informed of parties' liability for costs to be enabled to make a realistic determination.
Financial provision – lump sum – husband having received award of damages for personal injuries – judicial separation – wife applying for financial provision – husband's damages to be regarded as part of his resources.
Financial provision – relevant criteria not limited to spouses' immediate needs – consideration to be given to long term position.
The parties started to cohabit in 1973 and were married in 1976. The wife had two children of a previous marriage who became children of the family. In 1981 the husband suffered very serious injuries in a road accident rendering him paraplegic and confined to a wheelchair. The marriage broke down in 1983 and in 1985 the wife obtained a decree of judicial separation. The wife retained the matrimonial home, a rented council house. In 1985 she was able to purchase this house for £10,500. Its value at that time was £24,500. In 1988 the husband's claim for damages was settled at £418,000. The wife applied for ancillary relief. In March 1990 a deputy registrar ordered the husband to pay a lump sum of £32,000 to the wife on the basis of a clean break and dismissed all the wife's other claims.
The husband appealed to the Judge and the appeal was heard in August 1990. At that time, the wife had sold the council house for £33,000. She had bought another house jointly with a colleague at work for £65,000 with a mortgage of £40,000. The wife had made a down payment of £25,000. She and the co-owner jointly discharged the mortgage. The wife had under £5,000 in free capital and had a modest income from her job. The husband had bought a house, adapted to his special needs, for £137,000 with a mortgage of £30,000. He owned two cars and had £70,000 in three savings accounts. He had invested in a health club, purchasing premises worth £75,000. The health club ran at a loss and the husband had injected £63,000 for equipment and to keep it afloat. It was estimated that the business would not be profitable for three to five years. The husband's income was derived from state benefits and interest on his deposit accounts and, together, the Judge found, they only just covered his outgoings. Of the original £418,000 some £291,000 remained, mainly in the equity of the house, the premises of the health club, and the deposit accounts. The Judge found that the wife was in no immediate need of a cash sum and held that the husband's disability must be the paramount consideration. He
therefore allowed the appeal and discharged the order for the husband to pay a lump sum of £32,000.
The wife appealed.
Held – allowing the appeal: (1) It was submitted on behalf of the wife that the basis of the calculation for the appropriate order should be the £418,000 awarded by way of damages in 1988. But it was unrealistic to use as the starting point for any calculations sums available to the parties at some earlier period but no longer available at the time of the hearing. The former existence of such sums would be relevant to the circumstances of the case and pertinent to criticisms of a party's feckless or fraudulent behaviour, and might throw light on the just division of the capital which remained. The calculation had to be made on the basis of what actually existed. On the special facts of this case it was impossible to work out a sum by any sort of effective calculation.
(2) The damages awarded to the husband fell to be considered as part of his resources under s 25(2)(a) of the Matrimonial Causes Act 1973: Daubney v Daubney [1976] Fam 267 and Pritchard v JH Cobden Ltd and Another [1988] Fam 22. Damages by way of compensation for loss of amenity and pain and suffering should be taken into account. It was not correct to say that all such damages, or any part of such damages, were to be disregarded: dictum of Scarman, LJ in Daubney v Daubney [1976] Fam 267 at 277G explained. However, the reasons for the availability of capital by way of damages were relevant. It might be unacceptable to order payment to the other spouse of a small sum awarded specifically for pain and suffering or all the available capital might be absorbed by the requirement of residential accommodation. Capital for loss of amenity might be needed to acquire a replacement amenity which would be a financial need under s 25(2)(b) of the 1973 Act. Each case must be considered on its own facts. All the criteria in s 25 had to be taken into account, and those relating to the husband were obvious and important. The Judge rightly treated the husband's disability and consequential needs as very important. But he gave undue prominence to the husband's disability and underestimated the wife's position. He erred in carrying out the balancing exercise and his decision not to order any lump sum to the wife was plainly wrong and could not stand.
(3) Unless the immediate needs of the parties absorbed all the available assets, the criteria under s 25 were not limited to needs. Although the wife's needs in this case were at present met, there were wider considerations than the immediate future. The needs of the husband, both immediate and long term, had priority and no order should be made for the wife which would interfere with providing, within reason, for those needs. The marriage had lasted for 12 years. The wife lacked complete security since her existing capital would be inadequate to...
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