Wodehouse v Wodehouse

A financial remedy court may make a lump sum order only between the parties to the marriage. It has no jurisdiction under Matrimonial Causes Act 1973, section 23(1)(c), to direct a trust or other third party to pay the sum. A future or deferred order still requires a proper evidential basis for treating trust assets as a financial resource under section 25(1)(a). Procedural fairness also requires that the order made does not exceed the judgment or impose an unargued liability on an intervening third party. A pension acquired before marriage may nevertheless be shared where the order is properly grounded in the parties’ needs and falls within the court’s discretion.

The wife appealed from financial remedy orders made after a long childless marriage. The Deputy District Judge ordered the sale of the matrimonial home, a lump sum payable by the husband, and a 50% pension sharing order. The draft order additionally directed the intervening family trust to pay any unpaid balance from the husband’s future trust interest. On the first appeal, Judge Farquhar reduced the lump sum but upheld its structure.

On a second appeal, the Court of Appeal considered whether the lower courts had jurisdiction to impose the trust obligation and whether the pension sharing order was permissible, particularly where the pension had been accrued before the marriage.

1. Lump sum order allowed. The court unanimously held that the order directing the family trust to pay the wife was outside the court’s jurisdiction. Section 23(1)(c) of the Matrimonial Causes Act 1973 permits an order requiring one party to the marriage to pay a lump sum to the other. It does not authorise a lump sum order against a third party. The lower court could not avoid that limitation by making payment contingent on the husband’s default, describing the order as secured, or postponing payment until the death of the life tenant.
2. The order was also procedurally unfair because the liability imposed on the trust was introduced when the draft order was settled and exceeded the judgment. There was no evidence that either trust was willing or able to advance money to the husband. The evidence therefore could not support treating the trust assets as a financial resource available to him under section 25(1)(a) of the Matrimonial Causes Act 1973, consistently with the approach identified in Thomas v Thomas [1995] 2 FLR 668.
3. Pension sharing order upheld. The court rejected the challenge to the 50% pension sharing order. Although the pension had been accrued before the marriage and the Deputy District Judge used the language of sharing, the judgment showed that the order was substantially influenced by the wife’s needs and the parties’ impecunious circumstances. The first appellate judge was entitled to regard 50% as within the discretionary range.
4. The lump sum order was set aside. The order for sale and the pension sharing order remained in place. The court would have remitted the case for consideration of a deferred or adjourned lump sum, but accepted that the wife could not face further litigation.

• Court of Appeal (Civil Division): The second appeal was allowed in relation to the lump sum order and dismissed in relation to the pension sharing order.
• Eastbourne Family Court (Deputy District Judge Austin): Ordered sale of the matrimonial home, a lump sum, and equal pension sharing, with the later draft order directing the family trust to meet any unpaid balance.
• First appeal (Judge Farquhar): The lump sum was reduced to reflect the wife’s liability for half of the Northern Rock shortfall, but the structure of the order and the pension sharing order were upheld.