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Cite as: [2000] 2 FLR 981, [2001] AC 596, [2001] Fam Law 12, [2001] 1 All ER 1, [2000] 3 FCR 555, [2000] 3 WLR 1571, [2001] 1 AC 596, [2000] UKHL 54

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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)

v.

WHITE

(RESPONDENT)

(CONJOINED APPEALS)

ON 26 OCTOBER 2000

LORD NICHOLLS OF BIRKENHEAD

My Lords,

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.
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.
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
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.
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.
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.
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.
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
The applications proceeded at all stages on a 'clean break' basis. Holman J decided that Mrs 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.
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.
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.
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
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.
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:
Thus, and this is itself a notable aspect of the equality of contribution, in this case the business partnership was a reality.
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.
Against this background I turn to the statutory provisions.
The statutory provisions
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.
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.
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.
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, 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.
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:
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.
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:
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
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.
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.
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 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.'
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.
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
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.
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:
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:
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.
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:
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.
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.
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.
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.
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
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.
The next generation
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.
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.
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
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.
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 matrimonial property.
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
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.
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
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.
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.
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 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.
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.
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.
For the same reason, I cannot accept Mrs White's contrary contention that the assets should have been divided equally.
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.
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 return at present than the investment return to be expected if Mr White sold up and invested the net proceeds.
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,
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.
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.
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.
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 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..."
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 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".
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.
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.
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,
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,
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,
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 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.