Cowan v Cowan

Where matrimonial assets exceed both spouses’ financial needs, the court must seek a fair outcome by considering the statutory criteria and checking its proposed division against equality. Equality is a safeguard against discrimination between domestic and financial contributions. It is not a rule or presumption of equal division. Financial needs cannot determine the award or impose a ceiling upon it.

A truly exceptional contribution to the creation of wealth may justify departure from equality. The character and liquidity of assets, including the limitations of capitalised pension rights, also matter. Assets are ordinarily assessed when the court exercises its powers. Post-separation growth in existing assets does not itself exclude that growth from consideration. An appellate court may reassess the award without a retrial where the existing findings provide an adequate foundation.

The wife and husband married in 1959 and separated in 1994 after a marriage lasting 35 years. They had accumulated substantial wealth through plastics businesses developed principally by the husband. The wife had participated in the initial business and subsequently cared for the home and their children.

On the wife’s application for ancillary relief, Singer J assessed the available net assets at approximately £11.5 million. He awarded her a lump sum of £1.775 million, which, together with her housing and other assets, provided approximately £3.2 million. His assessment centred upon her reasonable requirements.

After that decision, the House of Lords delivered judgment in White v White [2000] 3 WLR 1571. The wife obtained permission to appeal and sought an approximately equal division. The questions were whether the original award could stand, whether a retrial was necessary and what division would fairly reflect the parties’ contributions, resources and other circumstances.

Held, unanimously allowing the appeal, that the wife’s lump sum should be increased from £1.775 million to £3 million. The remaining provisions of the order would stand.

1. Per Thorpe LJ, with Robert Walker and Mance LJJ agreeing on the governing approach, fairness was the objective of the discretion under section 25 of the Matrimonial Causes Act 1973. Equality supplied a cross-check against discrimination between the breadwinner and homemaker. It supplied neither a rule nor a presumption of equal division. The present decision concerned assets exceeding both parties’ needs; application to ordinary cases was left for another occasion.

2. The reasoning in White v White displaced an assessment which treated reasonable requirements as determinative. Although Singer J had considered contributions, his award remained centred upon that restrictive approach. His order therefore required reassessment. The statutory considerations had to be evaluated in their own right, without using contributions merely to adjust an assessment of requirements.

3. A retrial was unnecessary. The trial judge had heard extensive evidence and made sufficient findings on the matters now relevant. The change in law altered their emphasis rather than creating a need for fresh evidence. The Court of Appeal could exercise the discretion upon those findings.

4. The husband’s inventiveness and entrepreneurial achievements were truly exceptional and merited recognition in the division. That recognition was compatible with giving proper value to the wife’s domestic contribution. Mance LJ additionally favoured recognising special contributions across a broader spectrum, including exceptional domestic contributions, while discouraging detailed comparisons in ordinary cases.

5. Assets were to be assessed when the court exercised its powers. The wife’s unascertained interest had remained exposed to the risks of the husband’s dealings after separation and could benefit from their success. Post-separation growth did not justify adopting separation as the valuation date. The nature of assets also mattered: a capitalised pension income stream was not equivalent to freely disposable cash. Housing opportunities and possible continuing business activity were relevant, although the judges differed over their weight.

6. Robert Walker and Mance LJJ attached little or no weight to further generosity towards the husband’s brother, who had already been substantially rewarded. Such generosity could be funded from the husband’s own share. Thorpe LJ gave greater recognition to the husband’s wider family responsibilities. The wife’s wish to leave an estate could receive appropriate weight where resources exceeded needs.

7. The unratified Protocol 7 did not establish a right to equal division. The resulting allocation, approximately 38% to the wife and 62% to the husband, was fair in the circumstances. The appeal was allowed with costs, and permission to appeal to the House of Lords was refused.

• Court of Appeal: In Cowan v Cowan [2001] EWCA Civ 679 , the court unanimously allowed the wife’s appeal and increased the lump sum from £1.775 million to £3 million. It refused a retrial, refused an extension for the husband’s late respondent’s notice and refused permission to appeal to the House of Lords.
• High Court, Family Division: Singer J gave judgment on 31 July 2000 on the wife’s application for ancillary relief. His order provided a lump sum of £1.775 million alongside housing and other provision. No citation for that judgment is supplied.