England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE SOUTHEND COUNTY COURT
(His Honour Judge Yelton)

		The Royal Courts of Justice The Strand London WC2A Wednesday 20 December 2000

Friday 20th December 2001.

1. LORD JUSTICE THORPE: The parties to this appeal married in 1980 and had two daughters, born in 1982 and 1984. Their final matrimonial home was bought in 1995, some four years before their separation in 1999.

2. The marriage was dissolved by decree absolute on 16 May 2000. On the same day the wife launched her application for ancillary relief. The application was contested, and decided at a hearing before District Judge Chandler on 10 August 2000. He said that the final matrimonial home should be sold after 1 January 2001 and the proceeds used to purchase a three-bedroomed house in Wickford for the occupation of the wife and the two girls. He further said that, on the purchase, the wife should execute a charge in favour of the husband for 45 per cent of its equity, that charge to be redeemed on the first of the following events: (a) death or remarriage of the wife; (b) cohabitation of the wife for a period of more than six months; (c) the wife vacating for more than three months; (d) the wife selling; (e) the youngest child reaching 18 or completing full-time tertiary education, whichever shall be the last to occur; and (f) further order of the court. He finally provided that the husband make periodical payments to the wife during their joint lives, or until remarriage or further order, at the nominal rate of 50p each year.

3. Both parties appealed to the circuit judge, and on 27 September 2000 His Honour Judge Yelton allowed the appeal and the cross-appeal to the following extent. First, the provision for the redemption of the charge upon the youngest child attaining 18 or completing full-time tertiary education was struck from the order. Secondly, the wife's nominal periodical payments order was struck. There was a further small variation in that, whereas the district judge had said that a United Friendly policy was to be surrendered and the proceeds applied towards the purchase of a new house, the circuit judge said that it should be surrendered forthwith and the proceeds divided equally. The difference between those orders in relation to the United Friendly policy was therefore to ensure that the husband received his share immediately, and not at some uncertain future date after its interim investment in the property to be acquired.

4. The husband sought permission to appeal the order of His Honour Judge Yelton. That application succeeded, for reasons which I gave in a short judgment on 1 December 2000. Arrangements have been made to dispose of this short appeal expeditiously, and so it is that it has been brought into the list on this last week of term.

5. In fairness to the circuit judge, he did not have at the date of his sitting the guidance of the House of Lords' recent decision in the appeal of White v White. Accordingly, he did not have his attention directed specifically to the importance of equality of treatment. In my opinion, although in his speech Lord Nicholls emphasised that any principle he enunciated was to apply only to those comparatively rare cases where the totality of the assets exceeds the needs of the parties, nevertheless his emphasis upon the need to avoid gender discrimination and the consequential need to treat equality, if not as a starting point, still as a cross check to be applied to any provisional view formed in a court of trial is valid in a more general sense.

6. So I ask myself, how did the judge rationalise the deletion of a provision, the likely consequence of which would be to leave the wife with the enjoyment of almost all the capital built up during the marriage for a very long time and possibly for years beyond the husband's decease? All he said in his judgment was:

   "To put the wife in a house which she will have to sell or remortgage cannot be right. I see a strong argument for deleting that clause. . . The house is not capital but is somewhere for the wife to live."

7. It seems to me that that is altogether too partisan a perspective. It ignores the husband's reasonable entitlement to deploy capital to house himself at the end of a long marriage during which he has worked hard, mainly in the police service, and has contributed his earnings to the building of family capital. If the judge thought that the deletion was justified by the compensatory deletion of the nominal periodical payments order, I think he was plainly wrong. There are instances in which the interrelationship of capital and income orders justifies the increase of a wife's capital share as compensation for the loss of an income claim. I do not think that this was appropriately one. The husband has a reasonable and discernable need for his share of the family capital at the earliest time that the needs of the children permit. As soon as the wife's responsibilities as the home-maker for the children reach a point of natural termination, at that point clearly the husband is entitled to his capital share.

8. Although the husband's current income is not materially greater than the wife's, his earning capacity is potentially far stronger. The husband is currently enmeshed in dispute with the Essex Constabulary, and possibly even with the Home Office, over the circumstances in which his police service was terminated, but it seems to me that that dispute has clouded his judgment, to the extent that he is returning more than half the pension to which he is entitled on the ground that it is a disability provision. The judge found that he had in addition an earning capacity amounting to about £12,000 a year which he could enjoy without diminishing his entitlement to police pension at the rate of about £1,600 each month. The husband says that he has looked in vain for recent employment, but obviously it is not hard to conceive of future circumstances when the wife's claim to periodical payments would become real and not nominal.

9. So in my opinion the circuit judge had it right first time round. In my opinion, the judge's variations of the district judge's order were founded upon erroneous reasoning.

10. We have heard argument as to whether the allocation of only 45 per cent of the equity to the husband's share is supported by principle. Although it is a departure from equality, I think that the district judge was entitled to make that adjustment for the reasons that he gave, namely that the wife was at some long-term disadvantage, since the effect of the decree absolute was to deprive her of an entitlement to widow's pension during any period of survivorship. I also make it clear that the quantification of the husband's charge relates to 45 per cent of such sum as may be traced through from the sale of the final matrimonial home to the purchase of its substitute. Obviously he is not entitled to a charge in respect of any monies invested in the purchase of the substitute house which are derived from other sources.

11. I would accordingly restore the order of the district judge in its entirety, save that I would strike paragraph 2. That is no longer apt, since the policy has already been surrendered and the proceeds have already been equally divided between the parties.

12. I would only say, finally, that this is yet another instance of unnecessary litigation, and unnecessary expenditure in legal costs, arising from the routes of appeal in ancillary relief in the county court. The vast majority of ancillary relief claims brought upon the breakdown of marriage are brought in the county court. The huge majority of those cases, if they do not settle, are decided by the district judges. The district judges have the expertise. Nonetheless, there is an absolute right of appeal from the district judge to the circuit judge. Despite the introduction of a ticketing system in ancillary relief for circuit judges, this structure means that not infrequently one or other of the parties, dissatisfied with the ruling or the variation introduced by the circuit judge, comes to this court seeking the restoration of the order of the district judge. Of course, since the commencement of the restrictions introduced by section 55 of the Access to Justice Act 1999, there are distinct limits on this court's jurisdiction to entertain such secondary appeals. However, it is high time that decisions were taken on the reform of routes of appeal in family proceedings to correct difficulties which have been clearly demonstrated over the course of at least the last two decades.

13. However, that is a general observation, and I revert in this specific case to my conclusion that the appeal must be allowed and the order of the district judge restored, save as to paragraph 2.

14. LORD JUSTICE JONATHAN PARKER: I agree.
    ORDER: Appeal allowed. The order of the district judge to be restored, save as to paragraph 2. Counsel to have liberty to submit an alternative draft of paragraph 3. (Order not part of approved judgment)