Dharamshi v Dharamshi

In ancillary relief, financial needs are only one factor within the statutory scheme. Where resources exceed the parties’ housing and income needs, equality is the general guide, and departure from equality requires good reason. The former ceiling of reasonable requirements must not restrict the court’s assessment.

Contributions as spouse, parent and participant in a family business are equally relevant; no distinction should be drawn between domestic and business contributions. The Duxbury tables remain an appropriate method of capitalising income needs in ancillary relief. The Ogden tables are not required merely because they are used in personal injury cases.

The husband appealed against ancillary relief orders made by Lincoln County Court following the breakdown of the parties’ marriage. The order transferred the matrimonial home to the wife, required an immediate lump sum of £1,050,000, provided for a contingent further lump sum linked to a capital gains tax avoidance scheme, ordered child periodical payments and school fees, and awarded costs.

The appeal challenged the judge’s approach to quantifying the wife’s award, including the use of the Duxbury tables, the relevance of the wife’s reasonable requirements, the assessment of contributions and the contingent lump sum. Judgment was reserved pending the House of Lords decision in White v White, reported at [2000] 3 WLR 1571.

Appeal dismissed unanimously. Thorpe LJ delivered the principal judgment; Schiemann LJ and Aldous LJ agreed.

1. The judge’s original reasoning was insufficiently explained if assessed solely by the former approach, under which the wife’s annual income needs were capitalised and then adjusted by reference to the statutory criteria. However, that approach could no longer govern after White v White.

2. Financial needs or reasonable requirements are only one of the factors requiring particular regard under section 25 of the Matrimonial Causes Act 1973. In a case where available assets exceed the parties’ financial needs for housing and income, there must be no gender discrimination. Equality is the general guide, and departure from it requires good reason.

3. The ceiling of reasonable requirements developed in earlier Court of Appeal authority was rejected. The judge was entitled to award the wife a substantial fraction of the business-sale proceeds, rather than confining the award to capitalised income needs.

4. There was no distinction under section 25(2)(f) between the wife’s contribution to the business and her contribution as wife and mother. Both were valid contributions and had to be taken into account.

5. For capitalising income needs, the Duxbury tables remained the established method in ancillary relief. The reasoning in Wells v Wells did not require the use of the Ogden tables, since tort victims were a special category and the two contexts differed.

6. Although the contingent lump sum created practical concerns and was less consistent with an early clean break, deleting it would have left the wife substantially short of equality. The order therefore fell within the judge’s broad discretionary ambit.

The husband was ordered to pay the wife’s costs. Permission to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division) — Appeal from the ancillary relief orders made by Lincoln County Court was dismissed; costs and consequential directions were ordered.
• Lincoln County Court — His Honour Judge Jenkins made the ancillary relief order following the parties’ divorce.