White v.

White [2000] UKHL 54; [2000] 3 WLR 1571 (26th October, 2000) 19/08/23 09:16

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You are here: BAILII >> Databases >> United Kingdom House of Lords Decisions >> White v. White [2000] UKHL 54;
[2000] 3 WLR 1571 (26th October, 2000)
URL: http://www.bailii.org/uk/cases/UKHL/2000/54.html
Cite as: [2000] 3 FCR 555, [2000] 2 FLR 981, [2001] Fam Law 12, [2001] AC 596, [2000] UKHL 54, [2001] 1 AC 596,
[2001] 1 All ER 1, [2000] 3 WLR 1571

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JISCBAILII_CASES_FAMILY

White v. White [2000] UKHL 54; [2000] 3 WLR 1571 (26th

October, 2000)
HOUSE OF LORDS

Lord Nicholls of Birkenhead Lord Hoffmann Lord Cooke of Thorndon Lord Hope of Craighead Lord
Hutton

OPINIONS OF THE LORDS OF APPEAL FOR JUDGMENT

IN THE CAUSE

WHITE

(APPELLANTS)

v.

WHITE

(RESPONDENT)

WHITE

(APPELLANTS)

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White v. White [2000] UKHL 54; [2000] 3 WLR 1571 (26th October, 2000) 19/08/23 09:16

v.

WHITE

(RESPONDENT)

(CONJOINED APPEALS)

ON 26 OCTOBER 2000

LORD NICHOLLS OF BIRKENHEAD

My Lords,

1. Divorce creates many problems. One question always arises. It concerns how the property of the
husband and wife should be divided and whether one of them should continue to support the
other. Stated in the most general terms, the answer is obvious. Everyone would accept that the
outcome on these matters, whether by agreement or court order, should be fair. More
realistically, the outcome ought to be as fair as is possible in all the circumstances. But
everyone's life is different. Features which are important when assessing fairness differ in each
case. And, sometimes, different minds can reach different conclusions on what fairness requires.
Then fairness, like beauty, lies in the eye of the beholder.

2. So what is the best method of seeking to achieve a generally accepted standard of fairness?
Different countries have adopted different solutions. Each solution has its own advantages and
disadvantages. One approach is for the legislature to prescribe in detail how property shall be
divided, with scope for the exercise of judicial discretion added on. A system along these lines
has been preferred by the New Zealand legislature, in the Matrimonial Property Act 1976.
Another approach is for the legislature to leave it all to the judges. The courts are given a wide
discretion, largely unrestricted by statutory provisions. That is the route followed in this country.
The Matrimonial Causes Act 1973 confers wide discretionary powers on the courts over all the
property of the husband and the wife. This appeal raises questions about how the courts should
to exercise these powers in so-called 'big money' cases, where the assets available exceed the
parties' financial needs for housing and income.

3. The powers conferred by the 1973 Act have been in operation now for 30 years. This is the first
occasion when broad questions about the application of these powers have been considered by
this House. The House considered the statutory provisions recently, in Piglowska v.
Pigslowski [1999] 1 WLR 1360. But there the main issue concerned how appellate courts should
approach appeals from trial judges' decisions, rather than the principles trial judges should apply
when hearing applications for financial relief in this type of case. It goes without saying that
these principles should be identified and spelled out as clearly as possible. This is important, so
as to promote consistency in court decisions and in order to assist parties and their advisers and
mediators in resolving disputes by agreement as quickly and inexpensively as possible. The
present case is an unhappy, if extreme, example of how the parties' resources can be eroded
significantly by legal and other costs.

Mr and Mrs White

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White v. White [2000] UKHL 54; [2000] 3 WLR 1571 (26th October, 2000) 19/08/23 09:16

4. Martin and Pamela White were married in September 1961. She was 26 years old, he was
almost 24. They had three children. Tragically, their eldest child, Katherine, was killed in the
Kathmandu air crash in 1992. Philip is now 30, and Hilary is 29. The marriage broke down in
1994. A divorce decree nisi was granted in December 1995, and this was made absolute in May
1997. Mr and Mrs White both filed applications for ancillary financial relief. The appeals
before your Lordships' House are appeals in the ancillary relief proceedings.

5. Throughout their marriage Mr and Mrs White carried on a dairy farming business in
partnership. Farming was in their blood. They both came from farming families. The business
was successful. At the outset each of them contributed, in cash or in kind, a more or less equal
amount of capital, of about £2,000. A year after their marriage they bought a farm of their own,
set in beautiful countryside in Somerset. Blagroves Farm comprised 160 acres of land.
Blagroves itself, in which they made their home together, was a fine Jacobean house. The price
was £32,000. Of this, £21,000 was borrowed on mortgage. Mr White's father made them an
interest-free loan of £11,000, together with a further £3,000 used as working capital. Over time,
they bought further land, substantially increasing the size of the farm. Eventually the farm
comprised 337 acres. Throughout, Blagroves Farm and all the land were held by the two of
them jointly. The whole was treated as property of the farming partnership. In 1974 Mr
White's father released his loan. Initially this was reflected in an increase in Mr White's
partnership capital account. Ten years later Mr and Mrs White's capital accounts were
merged into a single joint capital account.

6. Blagroves Farm, with its live and dead stock and machinery, together with milk quota, were Mr
and Mrs White's principal assets. At the end of 1996, when the applications came before
Holman J, these items were worth, in round figures, £3.5 million.

7. Mr and Mrs White also farmed Rexton Farm as part of their partnership business. This farm
also comprised over 300 acres. Rexton Farm was ten miles from Blagroves Farm, but the two
were run as a single unit. Rexton was part of the Willett estate. Mr White's father bought this
estate in 1971 at an advantageous price, mainly with the assistance of borrowings. Later he
transferred the estate into the joint names of himself and his three sons. The four of them held
the estate in equal shares. Mr White's share of the cost of borrowing, in the form of interest
and endowment premiums, was met, through a tenancy agreement, by the Whites' farming
partnership. In 1993 Mr White acquired Rexton Farm, subject to a mortgage debt of
£137,000, as his partitioned share of the Willett estate. Rexton Farm, as distinct from the
farming business carried on at the farm, was held in Mr White's sole name. Unlike Blagroves
Farm, it was not in joint names, nor was it treated as belonging to the Whites' partnership.
Rexton Farm was worth £1.25 million.

8. Mr and Mrs White had also made pension provision for themselves. A substantial mortgage
was outstanding on both farms. After deduction of estimated liabilities for capital gains tax and
costs of sale, the overall net worth of Mr and Mrs White's assets was, in round figures, £4.6
million. This comprised, on the figures found and used by the judge: Mrs White's sole
property: £193,300 (mostly pension provision); her share of property owned jointly, either
directly or through the partnership: £1,334,000; Mr White's share of jointly-owned property:
£1,334,000; and Mr White's sole property: £1,783,500 (mostly Rexton Farm).

The proceedings

9. The applications proceeded at all stages on a 'clean break' basis. Holman J decided that Mrs

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White reasonably required £980,000. This was to be satisfied by payment of £800,000 and by
her keeping her sole assets. On being paid this amount, Mrs White was to transfer all the
jointly owned assets to Mr White. Thus, under this order, Mrs White was to receive
slightly over one-fifth of their total assets.

10. Holman J's reasoning can be summarised as follows. Neither party had any earning capacity
outside farming. Mrs White's wish to have enough money to enable her to buy a farm of her
own was not a reasonable requirement. It was unwise and unjustifiable to break up the existing,
established farming enterprise so that she could embark, much more speculatively, on another.
Her housing and financial needs were a farmhouse type of home, with stabling and 25 acres of
land for her horses, costing £425,000. She needed a net annual spendable income of £40,000.
Capitalised, having due regard to her age, a net income of this amount called for a 'Duxbury'
fund of £550,000. The Duxbury label is derived from the decision of the Court of Appeal,
Duxbury v Duxbury [1992] Fam 62, where this type of fund was first described. This
provision for Mrs White would leave Mr White with an amount exceeding his reasonable
requirements simply in terms of a home and income. But, additionally, he reasonably required to
be able to continue farming in a worthwhile way. The financial contributions from his family
made this reasonable.

11. Mrs White appealed to the Court of Appeal. Her appeal was successful. The Court of Appeal
(Butler-Sloss, Thorpe and Mantell L JJ) increased the amount of her payment from £800,000 to
£1.5 million. On the judge's figures, and after deducting £310,000, representing the parties' costs
in both courts, this meant that Mrs White's share of the total assets would be increased to
about two-fifths. Thorpe LJ regarded the farming partnership as the dominant feature in the
case. Mrs White was entitled to use her share as she thought fit. Only in so far as she sought
additional capital from Mr White was the judge entitled to evaluate critically the use to
which such additional capital was proposed to be put. There was no fairness in an outcome
which involved a transfer of property order in favour of Mr White. The court did not have
the material to assess how much Mrs White would have been entitled to receive on
dissolution of the partnership. But, having regard to the parties' contributions and the goal of
overall fairness, the provision for Mrs White should be increased by a further £700,000.
Mantell LJ agreed. Butler-Sloss LJ considered that Mrs White was entitled to more than her
partnership share, to recognise the contribution she made to the family as wife and mother over
and above her partnership role in the farming business. Mr White would still be able to
continue to farm, even if on a reduced scale.

12. Mr White appealed to your Lordships' House, seeking the restoration of Holman J's order.
Mrs White cross-appealed. She seeks an order giving her an equal share in all the assets.

Features of the case

13. I have already noted that this was a clean break case, where the children were grown up and
independent. The available assets substantially exceeded the amounts required by Mr and Mrs
White for their financial needs, in terms of a home and income for each of them. The general
observations I make later should be read with this in mind.

14. Two other features should be noted. First, and importantly, is the equality of contribution made
by Mr and Mrs White over their 33 years of married life. The judge found that each party
contributed a great deal of effort to the marriage and the welfare of the family. Within the home
it was the wife who primarily brought up the children, and she also worked hard in all sorts of
ways on the farm. Mr White was a hardworking and active farmer. Holman J said:

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'In truth this was a marital and also a business partnership in which, by their efforts and
commitment, each contributed to the full for 33 years, and any attempt to weigh the
respective contributions of their effort is idle and unreal.'

Thus, and this is itself a notable aspect of the equality of contribution, in this case the business
partnership was a reality.

15. A second feature, although of less importance, is that the assets of Mr and Mrs White did not
derive wholly from their own efforts. Without the initial loan of £14,000 from Mr White's
father, the young couple would not have been able to acquire their own farm when they did. The
advantageous terms on which Mr White acquired Rexton Farm stemmed from his father'
purchase of the Willett estate.

16. Against this background I turn to the statutory provisions.

The statutory provisions

17. The court's powers to make financial provision on divorce derive from statute. In 1970 the
statutory provisions were outdated and inadequate. They were primarily concerned with income
for the maintenance of spouses and children. The property adjustment provisions were limited.
They were first enacted in the middle of the 19th century, and so they reflected the values of
male-dominated Victorian society. Essentially, the property adjustment provisions comprised
power to order property to be settled on the other spouse and the children, and power to vary
ante-nuptial and post-nuptial settlements. The power to order a settlement dated back to the
Matrimonial Causes Act 1857, the statute which supplanted the jurisdiction of the old
ecclesiastical courts and set up the new Court for Divorce and Matrimonial Causes. The power
was exercisable against a wife whose adultery, cruelty or desertion had founded the divorce. It
was seldom used. There was no power to make a corresponding order against a husband. This
power was augmented in 1963 by power to order payment of a lump sum by either spouse. This
power also was not much used.

18. The power to vary settlements originated in the Matrimonial Causes Act 1859. The courts
did their best to stretch this power to accommodate modern needs, but there is a limit to judicial
creativity. The courts did not confine 'settlement' to formal trust deeds. The expression was
taken to include any property acquired by the husband and wife except property acquired by one
of them alone under an out-and-out disposition. This produced the striking anomaly that if the
matrimonial home was bought in joint names there was a settlement which could be varied,
but not if the house was owned by one of them alone.

19. These and other problems were considered in a report of the Law Commission prepared in 1969
under the chairmanship of Scarman J: see Family Law - Report on Financial Provision in
Matrimonial Proceedings, Law Com no. 25. An overall rationalisation of the court's powers was
needed urgently.

20. The Matrimonial Proceedings and Property Act 1970 made a fresh start. The powers of the court
were greatly extended. The relevant provisions in the 1970 Act were re-enacted in substantially
similar terms in Part II of the Matrimonial Causes Act 1973. Sections 23 and 24 of the
Matrimonial Causes Act 1973 empower the court, on granting a decree of divorce and in certain
other circumstances, to make financial provision orders and property adjustment orders.
Financial provision orders, under section 23, include orders that one party to the marriage shall
make payments to the other party. The payments may be periodical, either secured or unsecured,

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or lump sums. Property adjustment orders, under section 24, include orders that one party to the
marriage shall transfer property to the other party. Section 24A empowers the court to make
ancillary orders for the sale of property.

21. Section 25, as substituted by section 3 of the Matrimonial and Family Proceedings Act 1984,
sets out the familiar list of matters to which the court is to have regard in deciding how to
exercise these powers. Section 25(1) provides that it is the duty of the court in deciding whether,
and how, to exercise these powers to have regard to all the circumstances of the case. First
consideration is to be given to the welfare of any child of the family under the age of eighteen.
Section 25(2) provides that, as regards the exercise of these powers in relation to a party to the
marriage, the court shall in particular have regard to:

'(a) the income, earning capacity, property and other financial resources which each
of the parties to the marriage has or is likely to have in the foreseeable future,
including in the case of earning capacity any increase in that capacity which it
would in the opinion of the court be reasonable to expect a party to the marriage to
take steps to acquire;

(b) the financial needs, obligations and responsibilities which each of the parties to
the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the
marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions which each of the parties has made or is likely in the
foreseeable future to make to the welfare of the family, including any contribution
by looking after the home or caring for the family;

(g) the conduct of each of the parties, if that conduct is such that it would in the
opinion of the court be inequitable to disregard it;

(h) . . . the value to each of the parties to the marriage of any benefit . . . which,
by reason of the dissolution or annulment of the marriage, that party will lose the
chance of acquiring.'

22. Section 25A requires the court to consider the appropriateness of a 'clean break'. Sections 25B-
D, inserted by the Pensions Act 1995, make provision regarding benefits under pension
schemes. They are not material in the present case.

23. As originally enacted in 1970, in section 5(1) of the Matrimonial Proceedings Act 1970, the list
of factors to be taken into account contained a tailpiece. The tailpiece declared what should be
the objective of the court when exercising the statutory powers to make financial provision
orders and property adjustment orders.. The court was so to exercise these powers:

'. . . as to place the parties, so far as it 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.'

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This tailpiece was later deleted from the legislation, and nothing inserted in its place. In
consequence, the legislation does not state explicitly what is to be the aim of the courts when
exercising these wide powers. Implicitly, the objective must be to achieve a fair outcome. The
purpose of these powers is to enable the court to make fair financial arrangements on or after
divorce in the absence of agreement between the former spouses: see Thorpe LJ in Dart v
Dart [1996] 2 FLR 286, 294. The powers must always be exercised with this objective in view,
giving first consideration to the welfare of the children.

Equality

24. Self-evidently, fairness requires the court to take into account all the circumstances of the case.
Indeed, the statute so provides. It is also self-evident that the circumstances in which the
statutory powers have to be exercised vary widely. As Butler-Sloss LJ said in Dart v Dart
[1996] 2 FLR 286, 303, the statutory jurisdiction provides for all applications for ancillary
financial relief, from the poverty stricken to the multi-millionaire. But there is one principle of
universal application which can be stated with confidence. In seeking to achieve a fair outcome,
there is no place for discrimination between husband and wife and their respective roles.
Typically, a husband and wife share the activities of earning money, running their home and
caring for their children. Traditionally, the husband earned the money, and the wife looked after
the home and the children. This traditional division of labour is no longer the order of the day.
Frequently both parents work. Sometimes it is the wife who is the money-earner, and the
husband runs the home and cares for the children during the day. But whatever the division of
labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires
that this should not prejudice or advantage either party when considering paragraph (f), relating
to the parties' contributions. This is implicit in the very language of paragraph (f): '. . . the
contribution which each has made or is likely . . . to make to the welfare of the family, including
any contribution by looking after the home or caring for the family.' If, in their different spheres,
each contributed equally to the family, then in principle it matters not which of them earned the
money and built up the assets. There should be no bias in favour of the money-earner and
against the home-maker and the child-carer. There are cases, of which the Court of Appeal
decision in Page v Page (1981) 2 FLR 198 is perhaps an instance, where the court may have
lost sight of this principle.

25. A practical consideration follows from this. Sometimes, having carried out the statutory
exercise, the judge's conclusion involves a more or less equal division of the available assets.
More often, this is not so. More often, having looked at all the circumstances, the judge's
decision means that one party will receive a bigger share than the other. Before reaching a firm
conclusion and making an order along these lines, a judge would always be well advised to
check his tentative views against the yardstick of equality of division. As a general guide,
equality should be departed from only if, and to the extent that, there is good reason for doing
so. The need to consider and articulate reasons for departing from equality would help the
parties and the court to focus on the need to ensure the absence of discrimination.

26. This is not to introduce a presumption of equal division under another guise. Generally accepted
standards of fairness in a field such as this change and develop, sometimes quite radically, over
comparatively short periods of time. The discretionary powers, conferred by Parliament 30
years ago, enable the courts to recognise and respond to developments of this sort. These wide
powers enable the courts to make financial provision orders in tune with current perceptions of
fairness. Today there is greater awareness of the value of non-financial contributions to the
welfare of the family. There is greater awareness of the extent to which one spouse's business
success, achieved by much sustained hard work over many years, may have been made possible

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or enhanced by the family contribution of the other spouse, a contribution which also required
much sustained hard work over many years. There is increased recognition that, by being at
home and having and looking after young children, a wife may lose for ever the opportunity to
acquire and develop her own money-earning qualifications and skills. In Porter v Porter
[1969] 3 All ER 640, 643-644, Sachs LJ observed that discretionary powers enable the court to
take into account 'the human outlook of the period in which they make their decisions'. In the
exercise of these discretions 'the law is a living thing moving with the times and not a creature
of dead or moribund ways of thought.'

27. Despite these changes, a presumption of equal division would go beyond the permissible bounds
of interpretation of section 25. In this regard section 25 differs from the applicable law in
Scotland. Section 10 of the Family Law (Scotland) Act 1985 provides that the net value of
matrimonial property shall be taken to be shared fairly between the parties to the marriage when
it is shared equally or in such other proportions as are justified by special circumstances. Unlike
section 10 of the Family Law (Scotland) Act 1985, section 25 of the 1973 Act makes no
mention of an equal sharing of the parties' assets, even their marriage-related assets. A
presumption of equal division would be an impermissible judicial gloss on the statutory
provision. That would be so, even though the presumption would be rebuttable. Whether there
should be such a presumption in England and Wales, and in respect of what assets, is a matter
for Parliament.

28. It is largely for this reason that I do not accept Mr Turner's invitation to enunciate a principle
that in every case the 'starting point' in relation to a division of the assets of the husband and
wife should be equality. He sought to draw a distinction between a presumption and a starting
point. But a starting point principle of general application would carry a risk that in practice it
would be treated as a legal presumption, with formal consequences regarding the burden of
proof. In contrast, it should be possible to use equality as a form of check for the valuable
purpose already described without this being treated as a legal presumption of equal division.

Financial resources and financial needs

29. I turn next to a point where the current state of the law is not altogether satisfactory. That this is
so emerges clearly from the decision of the Court of Appeal in Dart v Dart [1996] 2 FLR
286. The point concerns the relationship of paragraph (a) and paragraph (b) in big money cases.
Paragraph (a) concerns the available financial resources of each of the parties. Paragraph (b) is
concerned with the 'financial needs, obligations and responsibilities' of each of the parties. In
practice, paragraph (b) seems to have become largely subsumed into a wider, judicially-
developed concept of 'reasonable requirements'. This wider concept appears, in turn, to have
displaced consideration of the parties' available resources as a factor in its own right.

30. This development had its origins in a decision of the Court of Appeal in O'D v O'D [1976]
Fam 83 where the alluring phrase 'reasonable requirements' was coined. In that case Ormrod LJ
considered the wife's position, 'not from the narrow point of "need", but to ascertain her
reasonable requirements.' A similar approach was adopted a few years later, in Page v Page
(1981) 2 FLR 198, 201. This was a case where there was enough capital to provide adequately
for both husband and wife. Not surprisingly, the court held that when considering the needs and
obligations of the parties a broad view could be taken. Ormrod LJ, whose judgments are a
valuable source of much of the jurisprudence in this area of the law, said:

'In a case such as this "needs" can be regarded as equivalent to "reasonable requirements",
taking into account the other factors such as age, health, length of marriage and standard

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of living.'

The third case in this trilogy of cases where resources exceeded financial needs is Preston v
Preston [1982] Fam 17. Ormrod LJ set out a list of general propositions. His second proposition
was as follows:

'. . . the word "needs" in section 25(1)(b) in relation to the other provisions in the
subsection is equivalent to "reasonable requirements", having regard to the other factors
and the objective set by the concluding words of the subsection . . .'

31. Rightly or wrongly, these passages have been understood as saying that reasonable requirements
is a more extensive concept than financial needs. This seems then to have led to a practice
whereby the court's appraisal of a claimant wife's reasonable requirements has been treated as a
determinative, and limiting, factor on the amount of the award which should be made in her
favour.

32. The soundness of this approach was considered by the Court of Appeal in Dart v Dart [1996]
2 FLR 286. Thorpe LJ, who has much experience in this field, gave the leading judgment. He
sought to reconcile the existing practice with the statutory provisions: see page 296f-h.
Reasonable requirements are more extensive than needs. What a person requires is likely to be
greater than what that person needs. The objective appraisal of what the applicant requires must
have regard to the other criteria of the section, including what is available, the parties'
accustomed standard of living, their age and state of health and 'perhaps less obviously' the
duration of the marriage, contributions and pension rights. Thorpe LJ said:

'Used thus the consideration of needs ceases to be paramount or determinative but an

elastic consideration that does not exclude the influence of any of the others. . . . in a big
money case where the wife has played an equal part in creating the family fortune it
would not be unreasonable for her to require what might be even an equal share.' (My
emphasis)

This conclusion, I have to say, seems to me worlds away from any ordinary meaning of financial
needs. Moreover, this conclusion gives an artificially strained meaning to reasonable
requirements, the more especially as this phrase was adopted originally as a synonym for
financial needs.

33. The other two members of the Court of Appeal were more doubtful. Peter Gibson LJ, at page
302, questioned the correctness of an approach which determines the quantum of an award by
reference only to the reasonable requirements of the applicant. Butler-Sloss LJ, with her
immense experience of family work, shared Peter Gibson LJ's doubts: see page 305. She
wondered whether the courts may not have imposed too restrictive an interpretation upon the
words of section 25 and given too great weight to reasonable requirements over other criteria set
out in the section. She considered that if spouses are in business together, the traditional
'reasonable requirements' approach to a wife's application for ancillary relief is not the most
appropriate method to arrive at the post-divorce adjustment of family finances.

34. Subsequently this question arose again, in Conran v Conran [1997] 2 FLR 615. Wilson J was
of the view that, notwithstanding the observations of Thorpe LJ in the Dart case, one could
not sensibly fit an allowance for contribution into an analysis of a wife's needs. That would do
violence to language and to section 25(2), where contribution and needs are set out as different
matters to which the court is required to have regard: see pages 623-4.

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35. Thus, as matters stand, there is a degree of confusion. I venture to think this has arisen
because the courts have departed from the statutory provisions. The statutory provisions lend no
support to the idea that a claimant's financial needs, even interpreted generously and called
reasonable requirements, are to be regarded as determinative. Another factor to which the court
is bidden to have particular regard is the available resources of each party. As my noble and
learned friend Lord Hoffmann observed in Piglowska v Pigslowski [1999] 1 WLR 1360,
1379, section 25(2) does not rank the matters listed in that subsection in any kind of hierarchy.
The weight, or importance, to be attached to these matters depends upon the facts of the
particular case. But I can see nothing, either in the statutory provisions or in the underlying
objective of securing fair financial arrangements, to lead me to suppose that the available assets
of the respondent become immaterial once the claimant wife's financial needs are satisfied. Why
ever should they? If a husband and wife by their joint efforts over many years, his directly in his
business and hers indirectly at home, have built up a valuable business from scratch, why
should the claimant wife be confined to the court's assessment of her reasonable requirements,
and the husband left with a much larger share? Or, to put the question differently, in such a case,
where the assets exceed the financial needs of both parties, why should the surplus belong solely
to the husband? On the facts of a particular case there may be a good reason why the wife
should be confined to her needs and the husband left with the much larger balance. But the mere
absence of financial need cannot, by itself, be a sufficient reason. If it were, discrimination
would be creeping in by the back door. In these cases, it should be remembered, the claimant is
usually the wife. Hence the importance of the check against the yardstick of equal division.

36. There is much to be said for returning to the language of the statute. Confusion might be
avoided if courts were to stop using the expression 'reasonable requirements' in these cases,
burdened as it is now with the difficulties mentioned above. This would not deprive the court of
the necessary degree of flexibility. Financial needs are relative. Standards of living vary. In
assessing financial needs, a court will have regard to a person's age, health and accustomed
standard of living. The court may also have regard to the available pool of resources. Clearly,
and this is well recognised, there is some overlap between the factors listed in section 25(2). In a
particular case there may be other matters to be taken into account as well. But the end product
of this assessment of financial needs should be seen, and treated by the court, for what it is: only
one of the several factors to which the court is to have particular regard. This is so, whether the
end product is labelled financial needs or reasonable requirements. In deciding what would be a
fair outcome the court must also have regard to other factors such as the available resources and
the parties' contributions. In following this approach the court will be doing no more than giving
effect to the statutory scheme.

The Duxbury paradox

37. This approach also furnishes a solution to the so-called Duxbury paradox in this type of case. In
the present case Holman J referred to 'the well known paradox that the longer the marriage and
hence the older the wife, the less the capital sum required for a Duxbury type fund.' A Duxbury
calculation is, no doubt, useful as a guide in assessing the amount of money required to provide
for a person's financial needs. It is a means of capitalising an income requirement. But that is all.
As I have been at pains to emphasise, financial needs are only one of the factors to be taken into
account in arriving at the amount of an award. The amount of capital required to provide for an
older wife's financial needs may well be less than the amount required to provide for a younger
wife's financial needs. It by no means follows that, in a case where resources exceed the parties'
financial needs, the older wife's award will be less than the younger wife's. Indeed, the older
wife's award may be substantially larger.

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The next generation

38. I must mention a further matter on which, through her counsel, Mrs White advanced
submissions. It arises out of observations made in Page v Page (1981) 2 FLR 198. Ormrod
LJ, at page 201, expressed the view that when assessing the amount of a lump sum provision
under section 25 it is not legitimate to take into account the wife's wish to be in a position to
make provision by will for her adult children. Dunn LJ, at page 203, made a similar statement.
Ormrod LJ repeated this in his third general proposition in Preston v Preston [1982] Fam 17,
25. Brandon LJ was of the same view: see page 36.

39. I agree with this proposition to a strictly limited extent. I agree that a parent's wish to be in a
position to leave money to his or her children would not normally fall within paragraph (b) as a
financial need, either of the husband or of the wife. But this does not mean that this natural
parental wish is wholly irrelevant to the section 25 exercise in a case where resources exceed the
parties' financial needs. In principle, a wife's wish to have money so that she can pass some on
to her children at her discretion is every bit as weighty as a similar wish by a husband. A
Duxbury type fund is intended to provide money for living expenses but not more. The amount
of the Duxbury fund is calculated on the basis that the capital as well as the income will be used.
The calculation assumes that nothing will be left when the wife dies. This was put graphically
by Peter Singer QC in a challenging paper presented to the Family Law Bar Association in May
1992. The Duxbury fund calculation involves using income and ultimately exhausting the
capital at the theoretical point when the wife would down her last glass of champagne and
expire as predicted by the life tables.

40. In my view, in a case where resources exceed needs, the correct approach is as follows. The
judge has regard to all the facts of the case and to the overall requirements of fairness. When
doing so, the judge is entitled to have in mind the wish of a claimant wife that her award should
not be confined to living accommodation and a vanishing fund of capital earmarked for
living expenses which would leave nothing for her to pass on. The judge will give to that factor
whatever weight, be it much or little or none at all, he considers appropriate in the
circumstances of the particular case.

Inherited money and property

41. I must also mention briefly another problem which has arisen in the present case. It concerns
property acquired during the marriage by one spouse by gift or succession or as a beneficiary
under a trust. For convenience I will refer to such property as inherited property. Typically, in
countries where a detailed statutory code is in place, the legislation distinguishes between two
classes of property: inherited property, and property owned before the marriage, on the one
hand, and 'matrimonial property' on the other hand. A distinction along these lines exists, for
example, in the Family Law (Scotland) Act 1985 and the (New Zealand) Matrimonial Property
Act 1976.

42. This distinction is a recognition of the view, widely but not universally held, that property
owned by one spouse before the marriage, and inherited property whenever acquired, stand on a
different footing from what may be loosely called matrimonial property. According to this
view, on a breakdown of the marriage these two classes of property should not necessarily be
treated in the same way. Property acquired before marriage and inherited property acquired
during marriage come from a source wholly external to the marriage. In fairness, where this
property still exists, the spouse to whom it was given should be allowed to keep it. Conversely,
the other spouse has a weaker claim to such property than he or she may have regarding

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matrimonial property.

43. Plainly, when present, this factor is one of the circumstances of the case. It represents a
contribution made to the welfare of the family by one of the parties to the marriage. The judge
should take it into account. He should decide how important it is in the particular case. The
nature and value of the property, and the time when and circumstances in which the property
was acquired, are among the relevant matters to be considered. However, in the ordinary course,
this factor can be expected to carry little weight, if any, in a case where the claimant's financial
needs cannot be met without recourse to this property.

The decision of Holman J

44. I turn now to the decision of Holman J. In a careful and lucid judgment, he faithfully followed
the approach of Thorpe LJ in Dart v Dart [1996] 2 FLR 286. He assessed the parties'
reasonable requirements and on that basis made his award. That was the determinative factor.
For reasons already given, I consider that, through no fault on his part, he was mistaken in
taking this course.

45. Indeed, the present case is a good illustration of the unsatisfactory results which can flow from
the reasonable requirements approach. Even if Rexton were excluded, Mr and Mrs White's
financial resources exceeded their financial needs. But Mrs White's award was confined to
her financial needs, while Mr White, whose financial needs were no greater, scooped the
entirety of the rest of the pool of resources. Even if Rexton were wholly left out of account, Mr
White still received roughly two-thirds of their assets. The initial cash contribution made by
Mr White's father in the early days cannot carry much weight 33 years later.

The decision of the Court of Appeal

46. In my view, therefore, the judge misdirected himself. Accordingly, the Court of Appeal was
entitled to exercise afresh the statutory discretionary powers. Both parties criticised the manner
in which the Court of Appeal did so. Mr White's primary complaint was that the Court of
Appeal wrongly departed from the reasonable requirements approach prescribed in Dart v
Dart. For reasons already given, I do not accept this criticism.

47. His next criticism was that the members of the Court of Appeal placed undue emphasis on the
financial worth of each party on the dissolution of the partnership. This was a wrong approach,
as was the view that the court should not exercise its statutory powers unless there was a
'manifest case for intervention'. I agree that both Thorpe LJ and Butler-Sloss LJ did attach
considerable importance to the wife's entitlement under the partnership. There are observations,
particularly in the judgment of Thorpe LJ, which, read by themselves, might suggest that in this
regard the clock was being turned back to the pre-1970 position. Then courts often had to
attempt to unravel years of matrimonial finances and reach firm conclusions on who owned
precisely what and in what shares. The need for this type of investigation was swept away in
1970 when the new legislation gave the court its panoply of wide discretionary powers. Since
then, the courts have not countenanced parties incurring costs which would be disproportionate
to the assistance the expenditure would give in carrying out the section 25 exercise.

48. All this is well established. So much so, that I cannot believe that either Thorpe LJ or Butler-
Sloss LJ intended to gainsay this approach. Indeed, Butler-Sloss LJ stated expressly that what
she had in mind, where parties were in business together, was a broad assessment of the
financial position and not a detailed partnership account. She rightly noted that, even in such a

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case, the parties' proprietorial interests should not be allowed to dominate the picture: see [1999]
2 WLR 1213, 1227. If Thorpe LJ went further than this, he went too far.

49. The wisdom of this approach is confirmed by the substantial body of additional evidence
produced for the first time in your Lordships' House. The new material included the Whites'
partnership agreement. From this evidence it emerged that, if a strict valuation of the parties'
shares on a dissolution of the partnership were needed, several disputes would have to be
resolved: disputes about the assets and liabilities of the partnership, a dispute about the value
of the milk quota, and a dispute over the proper interpretation of the somewhat obscure
retirement provisions in the partnership agreement. I do not think any of these differences need
be resolved. The House can, and should, proceed on the basis of the factual findings of Holman
J.

50. A further contention advanced for Mr White was that there was no basis on which the court
could increase Mrs White's award to an amount substantially in excess of her share of their
joint assets. Here again, I am unable to agree. As one would expect, both Thorpe LJ and Butler-
Sloss LJ had in mind all the available assets. They had in mind that the contribution made by Mr
White's father was significant. Both of them referred to Mrs White's dual role as business
partner and as wife and mother. They also had in mind the overall goal of fairness, a
consideration specifically mentioned by Thorpe LJ. The amount of their award was well within
the ambit of the discretion which the Court of Appeal was exercising afresh.

51. For the same reason, I cannot accept Mrs White's contrary contention that the assets should
have been divided equally.

52. Mrs White advanced the further argument that if proprietorial interests were to be looked at,
the court should have conducted a full and detailed investigation. I have already stated that such
an investigation was not called for. Her next submission was that the Court of Appeal should not
have adopted a selective re- valuation of only one of the assets, the milk quota, and then
without proper evidence. This criticism lacks substance. The Court of Appeal was
understandably anxious to make any necessary major adjustments in the figures but without
putting the parties to further expense. As matters have since turned out, the judge's figures have
to be adjusted downwards, by a substantial amount, in any event. The parties' untaxed costs of
their appeals to this House are estimated at the appalling sum of £530,000. This exceeds Thorpe
LJ's estimate of the reduction in value of milk quota since the decision of Holman J.
Whatever may be the rights and wrongs of the amount of the milk quota revaluation, the course
taken by Court of Appeal did not prejudice Mrs White.

53. Finally, Mrs White criticised the use of net values, arrived at after deducting estimates of
the costs and capital gains tax likely to be incurred if the farms were sold. Mr White still
owns and uses the farms. The farms have not been sold. Counsel submitted that the use of net
values in this situation should be discontinued. I do not agree. As with so much else in this
field, there can be no hard and fast rule, either way. When making a comparison it is important
to compare like with like, so far as this may be possible in the particular case. In the present case
a comparison based on net values is fairer than would be a comparison of Mrs White'
cash award and the gross value of the farms. Under her award Mrs White will have
money. She can invest or use it as she pleases. Mr White's equivalent, as a cash sum, is the
net value of the farms. The farms have to be sold before he can have money to invest or use
in other ways. What will be his financial position if he is able to retain the farms or parts of
them? Will he better off financially? Dairy farming is currently languishing in the doldrums. On
the evidence there is no reason to suppose that the farms are likely to yield a better financial

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return at present than the investment return to be expected if Mr White sold up and invested
the net proceeds.

54. My conclusion is that, applying the principles expounded in Piglowska v Pigslowski [1999] 1
WLR 1360, there is no ground entitling this House to interfere with the Court of Appeal's
exercise of discretion. I would dismiss the appeals of both Mr and Mrs White.

LORD HOFFMANN

My Lords,

55. I have had the advantage of reading in draft the speech which has been prepared by my noble
and learned friend Lord Nicholls of Birkenhead. I agree with it, and for the reasons which he has
given I too would dismiss both appeals.

LORD COOKE OF THORNDON

My Lords,

Having had the advantage of reading in draft the speech of my noble and learned friend Lord
Nicholls of Birkenhead, I am in full accord with its tenor and believe that it will do much to
enable English matrimonial property law to meet the requirements of contemporary society.
What little I have to add is mainly by way of emphasis and supplement.

56. Lord Nicholls mentions the detailed statutory regime prescribed in New Zealand by the
Matrimonial Property Act 1976 as a contrast with the more broadly-textured discretionary
jurisdiction conferred in England and Wales by sections 23, 24 and 25 of the Matrimonial
Causes Act 1973 as amended. One of the reasons that I think led the New Zealand Parliament
into so much detail was disappointment with the performance of the courts in exercising
jurisdiction under previous more generally-expressed legislation. In particular it was thought
that too often the non-monetary contributions of a wife and mother were undervalued. If the
spirit of my noble and learned friend's speech is followed by the English courts, there should not
be solid ground for such criticism here. This may be shown by a comparison.

57. In outline the scheme of the New Zealand Act of 1976 is that after a marriage of more than three
years, the values of the matrimonial home (whenever acquired) and the family chattels are
shared equally unless there are extraordinary circumstances rendering equality repugnant to
justice. Other matrimonial property is shared equally unless one party's contribution to the
marriage partnership has clearly been greater; the bringing into the matrimonial partnership of
separate property acquired by one spouse by inheritance or gift may rank as a contribution. If
the New Zealand regime had applied to the facts of the present case, I would expect an award to
the wife of certainly no less than 40 per cent of the total available property, which is
approximately what the Court of Appeal have ordered.

58. While a fairly broad discretionary jurisdiction does have the merit of flexibility, it will not be
satisfactory unless exercised with a reasonable degree of consistency. On this aspect attention
was focussed in argument on Mallet v Mallet (1984) 156 C.L.R. 605, since the Australian
statutory regime is similar in pattern to the English one. But not long after that decision a
somewhat differently constituted High Court of Australia took a somewhat different approach in
Norbis v Norbis (1986) 161 C.L.R. 513. The story is told by Dr Richard Ingleby of the
Victorian Bar in a contribution to Family Law Towards the Millennium: Essays for P.M.
Bromley, edited by Caroline Bridge (Butterworths, London, 1997) at pp. 404-405. In
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reproducing an extensive passage, I omit the footnotes."During the first 20 years of its existence
the Family Court of Australia has been engaged in a struggle between the Full Court and first
instance trial judges. The appellate court has sought to establish techniques to control the
exercise of discretion by first instance judges. The first of these techniques was the creation of
presumptions or guidelines for the exercise of judicial discretion. The main battleground in the
1980s was s 79 of the Family Law Act 1975, which establishes a regime for the exercise of
judicial discretion in relation to the division of property in the names of parties to a marriage
equivalent to that in s 25 of the English Matrimonial Causes Act 1973. Initially the High Court
of Australia (being the highest court in the land and the court to which appeals lie from the Full
Court of the Family Court) set itself against the Full Court. In Mallett Bell J at first instance
awarded Mrs Mallett 50% of the equity in the former matrimonial home, and 20% of the value
of Mr Mallett's business assets. On appeal by the wife the Full Court essentially held that Bell
J had paid insufficient attention to the method by which the business assets had been
accumulated, and substituted an order for all assets to be divided evenly. The High Court
rejected the Full Court's approach because, according to the majority, it was based on 'an
erroneous understanding of the operation of s 79(4) of the [Family Law] Act expressed in the
[Full C]ourt's proposition that 'equality ... is a convenient starting point where the matter at issue
involves a long marriage'. The High Court held that a presumption of equality as between the
contributions of a homemaker and an income earner was an unacceptable fetter 'on the
discretionary power which Parliament has left largely unfettered'. Deane J (as he then was) gave
the sole dissenting judgment in the Mallett High Court, and the importance of the dissent was
that it became the majority view when the High Court had the opportunity to reconsider the
question two years later. First, Deane J took care to point out that the Full Court had not sought
to fetter the exercise of discretion by trial judges and had indeed confined the application of the
standard to a particular category of marriage: 'there is no "principle" in family law that equality
is equity ... where the court is given a discretion it cannot lay down principles for to do so would
be to fetter its own discretion ... the cases which refer to equality do not lay it down as a
principle but merely as a convenient starting point where the matter at issue involves a long
marriage'. Deane J saw the 'standard' as, 'the enunciation not of a legal principle or presumption
but of a general counsel of experience on the subject of what constitutes, in some types of case,
an appropriate starting point for the determination of the particular order which should be made
in the particular circumstances of the individual case. Two years later, in Norbis, the question of
guidelines arose again, this time in the context of whether the courts should assess contributions
to property on a global or asset-by-asset basis. In Norbis, Deane J's repetition of his suggestion
of a norm which provided a guide to first instance judges without the same binding nature of a
precedent received support from Mason J (who had been in the majority in Mallett), and
Brennan J (as he then was), who was not a member of the Mallett High Court. This meant that
Wilson and Dawson JJ were now in the minority. The High Court was now supportive of the
Full Court's attempts to uphold 'consistency in judicial adjudication ... the antithesis of arbitrary
and capricious decision-making ... an important countervailing consideration supporting the
giving of guidance by appellate courts.' As Brennan J put it, 'The only compromise between
idiosyncracy in the exercise of discretion and an impermissible limitation of the scope of the
discretion is to be found in the development of guidelines from which a judge may depart when
it is just and equitable to do so - guidelines which are not rules of universal application, but
which are generally productive of just and equitable orders. Since the High Court's decision in
Norbis, an increasingly assertive Full Court has arguably increased the status of guidelines. This
has been done, not by holding that it is an appellable error to depart from a guideline, but by
holding that a trial judge has a duty to give adequate reasons for such a departure..."

59. I agree with the majority in Norbis. In this and other fields it is part of the function of a court of
final appeal to lay down from time to time, after considering the experience and opinions of
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more specialised courts, guidelines assisting judges, legal advisers and parties to resolve
disputes. There may be and is in the English Act no statutory presumption or prima facie rule,
but there is no reason to suppose that in prescribing relevant considerations the legislature had
any intention of excluding the development of general judicial practice. I doubt whether the
labels "yardstick" or "check" will produce any result different from "guidelines" or "starting
point".

60. An incidental advantage of such an approach is that it may save costs. The magnitude of the
costs reported in this case (evidently counsel's fees were not the major items) is a very bad
advertisement for the legal system.

61. The most important point, in my opinion, in the speech of my noble and learned friend Lord
Nicholls is his proposition that, as a general guide, equality should be departed from only if, and
to the extent that, there is good reason for doing so. I would gratefully adopt and underline it.
Widespread opinion within the Commonwealth would appear to accept that this approach is
almost inevitable, whether the regime be broad or detailed in its statutory provisions.

62. In the present case, bearing in mind that it was a marriage of more than thirty years, that there
were three children and that the wife was an active partner in the farming business as well as
meeting the responsibilities of wife and mother, the only plausible reason for departing from
equality can be the financial help given by the husband's father. I agree, however, that the
significance of this is diminished because over a long marriage the parties jointly made the most
of that help and because it was apparently intended at least partly for the benefit of both. As
Lord Simon of Glaisdale said, in delivering the judgment of the Privy Council in a case under
the former New Zealand legislation,

"Initially a gift or bequest to one spouse only is likely to fall outside the Act, because the
other spouse will have made no contribution to it. But as time goes on, and depending on
the nature of the property in question, the other spouse may well have made a direct or
indirect contribution to its retention.": Haldane v Haldane [1977] AC 673, 697.

63. My only doubt is whether the help from the husband's father should be seen as justifying a
difference of the order of 20 per cent in the overall shares of the parties. I think that £1.5 million
was probably about the minimum that could have been awarded to Mrs White without
exposing the award to further increase on further appeal. But I am prepared to accept that the
figure was one open to the Court of Appeal in the exercise of their discretion, and that your
Lordships should not interfere with it. So I would join in dismissing both appeals.

LORD HOPE OFCRAIGHEAD

My Lords,

64. I have had the advantage of reading in draft the speech which has been prepared by my noble
and learned friend Lord Nicholls of Birkenhead. I agree with it, and for the reasons which he has
given I too would dismiss both appeals.

LORD HUTTON

My Lords,

65. I have had the advantage of reading in draft the speech of my noble and learned friend Lord
Nicholls of Birkenhead. I am in full agreement with it and, in particular, I agree with his opinion

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that it is the duty of the court at first instance to arrive at a fair result by taking into account not
only the financial needs of the wife under section 25 (2)(b) of the Matrimonial Causes Act 1973
as amended, but also to take into account the financial resources of each of the parties under
section 25 (2)(a) and the contributions of each of the parties to the welfare of the family under
section 25(2)(f) together with the other factors set out in the subsection. Accordingly, I would
also dismiss both appeals.

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