Lauder v Lauder

On an application to vary periodical payments, reasonable needs remain relevant but are not necessarily a limiting factor where the payer has substantial surplus resources. The court must apply the statutory factors and seek a fair outcome, considering needs, relationship-generated disadvantage and sharing where appropriate.

A variation application cannot reopen capital claims or redistribute post-separation wealth by the back door. Duxbury remains the normal starting point for capitalising periodical payments, but it is a tool rather than the entire answer. Special factors may justify adjustment.

The wife appealed against a District Judge’s order varying periodical payments and capitalising them at £500,000. The order awarded £40,000 per annum and dismissed the parties’ remaining claims upon payment of the lump sum.

The appeal concerned the proper approach to variation after a long marriage, the relevance of the husband’s substantial post-separation wealth and income, the valuation of a commercial property, the use of Duxbury or annuity calculations, and costs. The central issue was whether an award based primarily on the wife’s generously interpreted reasonable needs was plainly wrong in light of White v White and Miller v McFarlane.

1. The appeal was allowed to the extent that the District Judge’s award was plainly wrong. The court substituted a lump sum of £725,000 for the termination of the wife’s periodical payments.

2. The appeal court applied the approach in Cordle v Cordle: the District Judge’s decision should stand unless affected by procedural irregularity, irrelevant or omitted considerations, or plain error. The valuation evidence did not establish such an error. The District Judge was entitled to adopt a conservative “not less than” valuation because the husband’s income and resources were sufficient to meet the claim without determining the precise market value of Brake Shear House.

3. Section 31(7) required consideration of all the circumstances, including changes in the matters relevant to the original order. The court therefore had to apply the statutory criteria in section 25 in the light of the factual matrix and the guidance in Miller v McFarlane. Reasonable needs were relevant but could not operate as a fixed ceiling where there were substantial surplus resources.

4. The wife’s long marriage, age, disability, limited earning capacity and continuing disadvantage in the labour market justified an element of compensation. The court found no basis for sharing the husband’s post-separation wealth because the capital claims had already been determined and could not be reopened through a variation application.

5. Capitalisation by reference to Duxbury was the appropriate starting point and a useful check, but it was not conclusive. The calculation had to be adjusted to achieve fairness, including provision for the wife’s later-life needs and unforeseen expenditure.

1. High Court (Family Division): appeal from the District Judge’s order of 4 April 2006. The order was varied and the capitalised award increased to £725,000.