ON APPEAL FROM THE HIGH COURT OF JUSTICE, FAMILY DIVISION, PRINCIPAL REGISTRY
MR JUSTICE BODEY
LOWER COURT NO: FD07D01254
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE JACOB
LORD JUSTICE WILSON
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Miss Lucy Stone QC and Mr Duncan Brooks (instructed by Kingsley Napley LLP) appeared for the Respondent "wife".
Hearing date: 28 February 2011
Crown Copyright ©
Lord Justice Wilson:
"39. There was, however, one substantial particular contribution to the welfare of the family, namely the wife's contribution of her S Ltd shares and (to a much lesser extent) the other properties in which she had inherited an interest many years before the parties met. It is a fact that the husband made no financial contribution to the marriage. It was the income on the S Ltd shares which supported the family throughout, together with very occasional share realisations enabling capital outlay to be made as required for the benefit of the family. Such financial contribution by the wife clearly goes into the melting-pot as a very important factor in deciding the outcome of the case." [Italics supplied]
Although it is not a matter of significance, I consider that Mr Pointer misreads the paragraph. He suggests that the "contribution" which, in the final sentence, the judge describes as a very important factor relates back to the word "income" in the preceding sentence. In my view, however, it relates back to the same word, namely "contribution", in the first sentence which, in his quotation of the paragraph, Mr Pointer omits. I consider therefore that the judge was ascribing great importance to the wife's contribution of the shares, rather than just to her contribution of the income which they generated. The wife's contribution of the shares as capital, rather than just as the generators of past income, was significant not least because it was only out of the proceeds of sale of them that the award to the husband could be made.
"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 … 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 homemaker and the child-carer."
Lord Nicholls makes clear that what is unacceptable is discrimination in the division of labour within the family, in particular between the party who earns the income and the party whose work is in the home, unpaid. Bodey J. was careful to stress that, in that in the present case neither party went out to work, their work in the home, although different, should be taken to be a contribution of equal value for the purposes of the award. But the law does not abjure all discrimination. On the contrary it is of the essence of the judicial function to discriminate between different sets of facts and thus between different claims. What is outlawed is discrimination on the ground of superficial differences which, on analysis, do not reflect substantive differences – such, of course, as the grounds specified in Article 14 of the ECHR and, in the present context, on the ground that the effort made by one party to the marriage, unlike that made by the other, happens to have resulted in financial reward. To find that, on top of the efforts of equal value made by each party in the home, the wife made a financial contribution to the marriage of great importance is not to discriminate between the parties in any unacceptable way: on the contrary it correctly recognises a substantive difference.
"The initial cash contribution made by Mr White's father in the early days cannot carry much weight 33 years later."
Lord Nicholls was there referring to an interest-free loan of £11,000, made to the parties in 1963 and later released, which had enabled them to purchase the farm upon which, until 1994, they had both worked and which, by the time of the trial in 1996, was worth £3.5m. Thus, on the facts in White, the importance of the source of the contribution of £11,000 diminished over time. The question is whether such justified the absolute terms of Baroness Hale's proposition.
"Non-matrimonial property represents a contribution made to the marriage by one of the parties. Sometimes, as the years pass, the weight fairly to be attributed to this contribution will diminish, sometimes it will not. After many years of marriage the continuing weight to be attributed to modest savings introduced by one party at the outset of the marriage may well be different from the weight attributable to a valuable heirloom intended to be retained in specie."
(a) Over time matrimonial property of such value has been acquired as to diminish the significance of the initial contribution by one spouse of non-matrimonial property.
(b) Over time the non-matrimonial property initially contributed has been mixed with matrimonial property in circumstances in which the contributor may be said to have accepted that it should be treated as matrimonial property or in which, at any rate, the task of identifying its current value is too difficult.
(c) The contributor of non-matrimonial property has chosen to invest it in the purchase of a matrimonial home which, although vested in his or her sole name, has – as in most cases one would expect – come over time to be treated by the parties as a central item of matrimonial property.
The situations described in (a) and (b) above were both present in White. By contrast, there is nothing in the facts of the present case which logically justifies a conclusion that, as the long marriage proceeded, there was a diminution in the importance of the source of the parties' entire wealth, at all times ring-fenced by share certificates in the wife's sole name which to a large extent were just kept safely and left to reproduce themselves and to grow in value.
"The notion of a special contribution to the welfare of the family will not successfully have been purged of inherent gender discrimination unless it is accepted that such a contribution can, in principle, take a number of forms; that it can be non-financial as well as financial; and that it can thus be made by a party whose role has been exclusively that of a home-maker. Nevertheless in practice … the claim to have made a special contribution seems so far to have arisen only in cases of substantial wealth generated by a party's success in business during the marriage."
Lord Justice Jacob:
Lord Justice Laws: