Wachtel v Wachtel

When determining financial provision following divorce, ordinary matrimonial misconduct should not reduce an award. Conduct affects provision only where it is obvious and gross, so that requiring one party to support the other would offend justice.

Domestic care is a contribution to family welfare and the acquisition of family assets. Where a long marriage involves homemaking and childcare, one-third of the capital assets and combined earnings may provide a rational starting point. It remains flexible, not a presumption or rule.

The court must consider capital and income together. A spouse should not ordinarily receive both half the capital and half the earnings. Any lump sum must be payable from available capital without crippling earning capacity, and the final package must be reviewed broadly for fairness.

Following the dissolution of an 18-year marriage, Ormrod J ordered the husband to pay the wife a lump sum of £10,000, annual maintenance of £1,500 and £500 annually for their daughter. He found the parties equally responsible for the marriage's breakdown.

The husband appealed against the financial orders. He argued that the judge had effectively divided both capital and income equally, had insufficiently considered the wife's conduct and earning capacity, and had awarded excessive child maintenance. The wife supported the orders and cross-appealed concerning the calculation of the lump sum.

The Court of Appeal, giving a joint judgment, considered for the first time after full argument the principles governing ancillary relief under the Matrimonial Proceedings and Property Act 1970 following divorce under the Divorce Reform Act 1969. The principal issues concerned conduct, domestic contributions, the matrimonial home, the one-third starting point, lump sums and remarriage.

1. Disposition. The husband's appeal was allowed in part and the wife's cross-appeal was dismissed. The annual payment to the wife remained £1,500 and the child's payment was reduced from £500 to £300. The court's substantive reasoning fixed the lump sum at £6,000 and directed payment of that amount within 28 days. The terminal order note also records “£5,000 instead of £10,000”, creating an internal inconsistency in the supplied text.

2. Conduct. The breakdown-based divorce regime displaced the former practice of imposing financial consequences for matrimonial guilt. Although section 5(1) of the Matrimonial Proceedings and Property Act 1970 required regard to conduct, ordinary blame did not justify reducing financial provision. Reduction or refusal remained available where conduct was obvious and gross, and support would offend a reasonable sense of justice.

3. Family assets and domestic contributions. Family assets comprised capital assets intended for family use, including the matrimonial home, and revenue-producing assets such as earning capacity. The 1970 Act was a reforming statute conferring wide powers to readjust the parties' financial positions. Under section 5(1)(f), homemaking and childcare constituted substantive contributions to family welfare. Where the home had been acquired and maintained through both spouses' joint efforts, it could be treated as their joint property regardless of legal title.

4. Flexible one-third starting point. One-third of combined resources remained a rational starting point, but never a rule. For a long marriage in which one spouse cared for the home and children, the court could begin with one-third of the family capital and one-third of joint earnings. The approach might be unsuitable for a short marriage, a childless marriage or a case in which the spouse could readily work. Flexibility and the justice of the particular case remained controlling.

5. Interaction between capital and income. Capital and periodical payments had to be considered together. A spouse receiving a capital share enabling the acquisition of accommodation could not ordinarily also claim half the other spouse's earnings. Here, £1,500 represented approximately one-third of the parties' combined earning capacity after allowing for the wife's potential earnings.

6. Lump sums and remarriage. A lump sum should not be ordered unless available capital permitted payment without crippling earning capacity. Where capital was sufficient, an outright award could reduce continuing maintenance and bring financial finality. Prospective remarriage did not reduce a spouse's earned capital share and was disregarded when assessing periodical payments, which would cease upon actual remarriage.

1. Court of Appeal: The husband's appeal was allowed in part. The wife's annual payment remained £1,500, child maintenance was reduced to £300 annually, and the court's reasoning substituted a £6,000 lump sum. The wife's cross-appeal was dismissed. Leave to appeal to the House of Lords was refused.
2. High Court, Family Division: Ormrod J had ordered a lump sum of £10,000 or half the net value of the matrimonial home, whichever was less, annual maintenance of £1,500 for the wife, and £500 annually for the daughter.