Foster v Foster

In ancillary relief proceedings, spouses who both work and contribute what they can to a joint enterprise may be treated as having contributed equally, despite substantial differences in their earnings or direct financial payments. Differences in income should not be valued differently from the respective contributions of a breadwinner and homemaker.

Assets accumulated through joint efforts should ordinarily be shared equally unless needs, property introduced from outside the marriage, or another relevant circumstance provides good reason to depart from equality. The short duration of a childless marriage does not itself justify unequal sharing of a substantial surplus generated by joint efforts. An appellate court may intervene only where the first-instance evaluation was procedurally irregular, legally misdirected or plainly wrong.

Following a short, childless marriage, the husband and wife sought the distribution of substantial capital accumulated through the acquisition, development and sale of properties. Both had remained employed. The wife earned considerably more and supplied most of the money, while both contributed to the property enterprise.

The district judge returned certain initial and post-separation contributions, then divided the profits equally. On the wife's appeal, the circuit judge held that her financial contributions had been undervalued and varied the division from approximately 61:39 to 70:30 in her favour.

The husband appealed. The central issues were whether spouses' contributions to a joint enterprise could be treated as equal despite unequal financial inputs, and whether the district judge's decision was plainly wrong so as to permit appellate intervention.

1. Appeal allowed unanimously; the district judge's order restored. Lady Justice Hale gave the leading judgment. Lord Justice Chadwick agreed, and Lord Justice Peter Gibson agreed and gave additional reasons. The circuit judge had no proper basis for varying the district judge's order because her decision was not plainly wrong. Her basic approach was correct.

2. An appeal from a district judge to a circuit judge in ancillary relief proceedings is governed by the ordinary appellate principles. Intervention is justified by procedural irregularity, consideration of irrelevant matters, omission of relevant matters, or a conclusion that is plainly wrong. The circuit judge had merely substituted his own assessment of the weight attributable to the wife's financial contribution.

3. The universal rule is to apply the criteria in section 25(2) of the Matrimonial Causes Act 1973 to all the circumstances and reach a fair, non-discriminatory result. Equality is neither a presumption nor a starting point, but it is a yardstick against which the proposed distribution should be checked. Departure from equality requires a good reason.

4. There is no principled basis for treating differences in spouses' incomes differently from differences between breadwinning and homemaking. Where both spouses work and pool their incomes, or spend comparable proportions for the family's benefit, they may properly be regarded as contributing equally to family assets. The court may consider the parties' respective roles in acquiring and realising assets and the fact that each contributed what he or she could, rather than comparing only the amounts paid.

5. The short duration of a childless marriage did not justify unequal sharing of the surplus generated by the parties' joint property enterprise. Neither party had unmet housing or continuing needs. The district judge was therefore entitled to divide the profits equally after making the adjustments she considered appropriate.

6. Property introduced from outside the marriage is one relevant circumstance. Its nature, value, time and manner of acquisition must be considered, together with the parties' needs. The district judge was entitled to include the husband's pre-marital property in the joint enterprise and to treat the inflationary gain as having accrued during the marriage. Appellate alteration of that discretionary evaluation would amount to impermissible fine-tuning.

1. Court of Appeal (Civil Division): The husband's second appeal was allowed unanimously. The circuit judge's order was set aside and the district judge's order restored: [2003] EWCA Civ 565.
2. Chelmsford County Court, circuit judge: HHJ Peter Thompson allowed the wife's appeal and varied the distribution to 70% for the wife and 30% for the husband.
3. Chelmsford County Court, district judge: District Judge Silverwood Cope returned specified initial and post-separation contributions and divided the remaining profits equally, producing an approximate 61:39 division in the wife's favour.