596

McAlpine Construction v Panatown (HL(E)) [2001 ] 1 AC

Lord Millett

All the supposed difficulties disappear once it is grasped that the building A
employer's performance interest merely reflects the interest of the building
owner and that his loss cannot exceed that of the building owner.

Conclusion
In the present case UIPL is fully aware of the present proceedings and
supports Panatown's claim to substantial damages. It has no wish to be g
forced to invoke its own subsidiary and inferior remedy under the D C D .
There is no need to join it in the proceedings or require it to enter into a
formal waiver of its claim under the D C D Any claim it may have under the
D C D will be satisfied by the payment of damages to Panatown.
I would dismiss the appeal.
c
Appeal allowed with costs.
Matter remitted to arbitrator for
reconsideration.

Solicitors: Masons, Manchester; CMS Cameron McKenna.

SH
D

House of Lords

Whiter White
2000 July 3,4, 5; Lord Nicholls of Birkenhead, Lord Hoffmann,
Oct 26 Lord Cooke of Thorndon, Lord Hope of Craighead
and Lord Hutton
F
Husband and wife — Financial provision — Lump sum award — Means of parties —
Parties in farming partnership — Substantial contribution to business by wife —
Wife's wish to continue similar business — Parties' financial resources exceeding
financial needs — Assessment of lump sum payment to wife — Matrimonial
Causes Act 1973 (c 18), s 25 (as substituted by Matrimonial and Family
Proceedings Act 1984 (c 42), s 3)
C
The parties had both farmed independently before they married in 19 61 and
continued farming in equal partnership thereafter. Following the breakdown of their
marriage in 1994 the wife petitioned for divorce and applied for ancillary relief so as
to cede the farms to the husband and seek a lump sum of £ r i m to enable her to
continue farming on her own. The judge found that the net assets were £4-6111, of
which £1-5111 belonged to the wife. He declined to break up the farming enterprise
and, having capitalised the wife's income needs and assessed the cost of buying a H
home for her, awarded her a lump sum of £800,000 on a "clean break" basis, leaving
the farms and business with the husband. The wife appealed, contending, inter alia,
that the judge had failed to give sufficient weight to the duration, extent, diversity and
value of her contribution to the partnership and to recognise that her contributions
were the dominant factor in the balancing act required by section 25 of the
 597
[2 001 ] 1 AC Wh ite v Wh ite (H L(E))

A Matrimonial Causes Act 1973,' as substituted, and that an award of one-fifth of the
total net assets was manifestly unfair and plainly wrong. The Court of Appeal held,
allowing her appeal, that an approach based on the wife's future needs or reasonable
requirements was inappropriate and that, having regard to all the circumstances of
the case in accordance with section 25 of the 1973 Act as substituted, she was entitled
to a lump sum of f i - j m reflecting her contribution both to the business and to the
family.
g On the husband's appeal and the wife's cross-appeal—
Held, dismissing the appeal and the cross-appeal, that there was no legal
presumption of equal division when awarding ancillary relief, but a judge exercising
his statutory discretion pursuant to section 25 of the Act should, before making his
final decision, check his tentative views against the yardstick of equality of division
and depart from equality only if, and to the extent that, there was good reason for
doing so; that a claimant's financial needs or "reasonable requirements" should not
r be regarded as determinative in arriving at the amount of an award, and the
assessment of financial needs should be treated only as one of several factors to be
taken into account, particularly when the financial resources of the parties exceeded
their financial needs; that although a claimant parent's wish to be in a financial
position to make provision by will for adult children could not be regarded as a
financial need under section 25(2)(b), the judge was entitled in a case where resources
exceeded need, to give such weight as was appropriate to that parental wish; that the
judge had misdirected himself in treating the parties' reasonable requirements as the
determinative factor and confining the wife's award to her financial needs while
leaving to the husband, whose financial needs were no greater, the entirety of the rest
of the pool of resources; that, accordingly, the Court of Appeal had been entitled to
exercise afresh the statutory discretionary powers under section 25; and that there
were no grounds for interfering with the exercise of that discretion (post, pp 605 F-G,
6O6B, B-F, 608B-609B, C-E, G - 6 I O B , H - 6 I I C , 612G-613C, 615E-G, 6 I 6 A - D ) .
Page v Page (1981) 2 FLR 198, CA; Preston v Preston [1982] Fam 17, CA and
E Dart v Dart [1996] 2 FLR 286, CA considered.
Decision of the Court of Appeal [1999] Fam 304; [1999] 2 WLR 1213; [1998]
4 All ER 659 affirmed.

The following cases are referred to in the opinions of their Lordships:

Conran v Conran [1997] 2 FLR 615
Dart v Dart [1996] 2 FLR 286, CA
F Duxbury v Duxbury (Note) [1992] Fam 62; [1991] 3 WLR 639; [1990] 2 All ER 77,
CA
Haldane vHaldane [1977] AC 673; [1976] 3 WLR 760, PC
Mallet v Mallet (198 4) 156CLR605
NorbisvNorbis(i986) 161 CLR513
O'D v O'D [1976] Fam 83; [1975] 3 WLR 308; [1975] 2 All ER 993, CA
Page v Page (1981) 2 FLR 198, CA
C Piglowska vPiglowski [1999] 1 WLR 1360; [1999] 3 All ER 632, HL(E)
Porter vPorter [1969] 1 WLR 1155; [1969] 3 All ER 640, CA
Preston v Preston [1982] Fam 17; [1981] 3 WLR 619; [1982] 1 All ER 41, CA

The following additional cases were cited in argument:

Burgess v Burgess [1996J 2 FLR 34, CA
Calderbank v Calderbank [1976] Fam 93; [1975] 3 WLR 586; [1975I 3 All ER 333,
H CA
Daubney v Daubney [19J6I Fam 267; [1976J 2 WLR 959; [1976] 2 All ER453, CA
Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27; [1999J 3 WLR 1113;
[i999]4AllER 7 o5,HL(E)
1
Matrimonial Causes Act 1973, s 25(2), as substituted: see post, p 604B-E.
598
White v White (HL(E)) [2001] 1 AC

Lilford (Lord) v Glynn [1979] 1WLR 78; 11979] 1 All ER441, CA A

PvP (FinancialProvision: Lump Sum) [1978] 1 WLR483; [1978] 3 All ER 70, CA
Trippas v Trippas [1973] Fam 134; [1973] 2 WLR 585; [1973] 2 All ER 1, CA
APPEAL from the Court of Appeal
This was an appeal by the husband, Martin Edward John White, and a
cross-appeal by the wife, Pamela Rosemary White, from a decision of the
Court of Appeal (Butler-Sloss, Thorpe and Mantell LJJ) on 19 June 1998 B
allowing the wife's appeal from an order of Holman J dated 28 February
1997 awarding £800,000 to the wife on a "clean break" basis and giving the
farms and business to the husband. The Court of Appeal awarded the wife
the sum of £1-5111.
On 18 February 1999 the Appeal Committee of the House of Lords (Lord
Steyn, Lord Hope of Craighead and Lord Millett) granted petitions by both c
parties for leave to appeal.
The facts are stated in the opinion of Lord Nicholls of Birkenhead.
Nicholas Mostyn QC and Lewis Marks for the husband. Section 25 of
the Matrimonial Causes Act 1973 which sets out the way in which the
court's discretionary power to make financial provision must be exercised
does not mention a presumption of equality, nor did Parliament intend any D
such presumption when the legislation was originally enacted in 1970. The
principal interpreter of the statute is a series of judicial decisions which lay
down guidelines for the exercise of the discretion and these have been
described as binding precedent: see Dart v Dart [1996] 2 FLR 286;
Fitzpatrick v Sterling Housing Association Ltd [2001] 1 AC 27; Trippas v
Trippas [1973] Fam 134; O'D v O'D [1976] Fam 83; Calderbank v E
Calderbank [1976] Fam 93; PvP (Financial Provision: Lump Sum) [1978]
1 WLR 483; Daubney v Daubney [1976] Fam 267; Page v Page (1981) 2 FLR
198; Preston v Preston [1982] Fam 17; Burgess v Burgess [1996] 2 FLR 34;
Piglowska v Piglowski [1999] 1 WLR 1360 and Haldane v Haldane [1977]
AC 673. The most important principle which emerges is the identification of
the function of the court as being to ascertain the reasonable requirements of
the claimant. If the needs of both parties are satisfied and there is a surplus it F
should lie where it falls. When the court exercises its discretion under the
1973 Act often one party is worse off than the other as a result of the
marriage. Where the assets are unrealisable it is common for the wife's
award to be lower than it would be if they were liquid.
The Court of Appeal's order would prevent the husband from continuing
his dairy farming business. Holman J recognised that reality and decided, in Q
the exercise of his unfettered discretion, that it was fair, just and reasonable
to allow the husband to carry on farming while enabling the wife to live in a
country home with a reasonable unearned index-linked income for the rest
of her life. Although the parties would have different capital bases, their net
spending power and therefore their standards of living would not be
dissimilar. Since it cannot be said that Holman J's decision was plainly
wrong the Court of Appeal had no grounds for interfering with it. The Court
of Appeal erred in taking into account the wife's entitlement on dissolution
of the partnership without knowledge of the terms of the partnership
agreement and without affording the husband an opportunity to argue its
legal effects. There was no justification for discriminating arbitrarily in
 599
[2001] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A favour of the wife and awarding her a substantial extra sum referable to her
role as wife and mother.
James Turner QC and Philip Marshall for the wife. The judgment of
Holman J is dominated by the test of "reasonable requirements" whereas he
should have factored into that test the contributions element. "Needs" and
"contributions" are more in accord with what section 25 of the 1973 Act
S requires.
The application of the section 25 criteria should depend on the
circumstances of each case without any statutory gloss. The most non-
discriminatory, non-paternalistic and fair way to deal with section 25 is to
take equality as the starting point. There is a significant difference between
the starting point and the outcome. Even if the Court of Appeal was right
r that there should be a reduction under the principle of equality in calculating
the wife's share, the reduction made was too great. [Reference was made to
Lord Lilford v Glynn [1979] 1 WLR 78 and Conran v Conran [1997] 2 FLR
615.]
In the present case the Duxbury principle (Duxbury v Duxbury (Note)
[1992] Fam 62) did not give a just result. The dominant feature was the
wife's contribution. The Duxbury approach is not required by statute and it
D is a tool and not a rule. The constraints of the Duxbury calculation could
not be manipulated to meet the justice of the present case, where there was a
marriage of long duration and each party had made large contributions.
The Court of Appeal was correct to attach importance to the wife's
proprietorial interest in the partnership assets since there had been a genuine
working partnership and not a partnership in name only. But her strict
^ partnership interest reflected only part of her true "earned" entitlement and
should not have been taken as the starting point for the section 25 exercise.
In any event, the end result should have been an equal division of the
available assets.
There is no reason why the wife should be obliged to take cash while the
husband is permitted to retain the assets since their entitlements are
indistinguishable.
Mostyn QC in reply. There is no jurisprudential justification for a
starting point of equality, nor is there a difference between a starting point
and a presumption.

Their Lordships took time for consideration.

c 26 October. LORD NICHOLLS OF BIRKENHEAD My Lords,

divorce creates many problems. One question always arises. It concerns
how the property of the husband and wife should be divided and whether
one of them should continue to support the other. Stated in the most general
terms, the answer is obvious. Everyone would accept that the outcome on
these matters, whether by agreement or court order, should be fair. More
realistically, the outcome ought to be as fair as is possible in all the
circumstances. But everyone's life is different. Features which are important
when assessing fairness differ in each case. And, sometimes, different minds
can reach different conclusions on what fairness requires. Then fairness, like
beauty, lies in the eye of the beholder. So what is the best method of seeking
to achieve a generally accepted standard of fairness? Different countries
600
White v White (HL(E)) [2001] 1 AC
Lord Nicholls of Birkenhead

have adopted different solutions. Each solution has its own advantages and A
disadvantages. One approach is for the legislature to prescribe in detail how
property shall be divided, with scope for the exercise of judicial discretion
added on. A system along these lines has been preferred by the New Zealand
legislature, in the Matrimonial Property Act 1976. Another approach is for
the legislature to leave it all to the judges. The courts are given a wide
discretion, largely unrestricted by statutory provisions. That is the route
followed in this country. The Matrimonial Causes Act 1973 confers wide
discretionary powers on the courts over all the property of the husband and
the wife. This appeal raises questions about how the courts should exercise
these powers in so-called "big money" cases, where the assets available
exceed the parties' financial needs for housing and income.
The powers conferred by the 1973 Act have been in operation now for
30 years. This is the first occasion when broad questions about the c
application of these powers have been considered by this House. The House
considered the statutory provisions recently, in Piglowska v Pigslowski
[1999] 1 WLR 1360. But there the main issue concerned how appellate
courts should approach appeals from trial judges' decisions, rather than the
principles trial judges should apply when hearing applications for financial
relief in this type of case. It goes without saying that these principles should
be identified and spelled out as clearly as possible. This is important, so as to
promote consistency in court decisions and in order to assist parties and their
advisers and mediators in resolving disputes by agreement as quickly and
inexpensively as possible. The present case is an unhappy, if extreme,
example of how the parties' resources can be eroded significantly by legal
and other costs.
E
Mr and Mrs White
Martin and Pamela White were married in September 1961. She was
26 years old, he was almost 24. They had three children. Tragically, their
eldest child, Katherine, was killed in the Kathmandu air crash in 1992.
Philip is now 30, and Hilary is 29. The marriage broke down in 1994.
A divorce decree nisi was granted in December 1995, and this was made
absolute in May 1997. Mr and Mrs White both filed applications for
ancillary financial relief. The appeals before your Lordships' House are
appeals in the ancillary relief proceedings.
Throughout their marriage Mr and Mrs White carried on a dairy farming
business in partnership. Farming was in their blood. They both came from
farming families. The business was successful. At the outset each of them
contributed, in cash or in kind, a more or less equal amount of capital, of C
about £2,000. A year after their marriage they bought a farm of their own,
set in beautiful countryside in Somerset. Blagroves Farm comprised 160
acres of land. Blagroves itself, in which they made their home together, was
a fine Jacobean house. The price was £32,000. Of this, £21,000 was
borrowed on mortgage. Mr White's father made them an interest-free loan
of £11,000, together with a further £3,000 used as working capital. Over
time, they bought further land, substantially increasing the size of the farm.
Eventually the farm comprised 337 acres. Throughout, Blagroves Farm and
all the land were held by the two of them jointly. The whole was treated as
property of the farming partnership. In 1974 Mr White's father released his
loan. Initially this was reflected in an increase in Mr White's partnership
 601
[2001] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A capital account. Ten years later Mr and Mrs White's capital accounts were
merged into a single joint capital account.
Blagroves Farm, with its live and dead stock and machinery, together with
milk quota, were Mr and Mrs White's principal assets. At the end of 1996,
when the applications came before Holman J, these items were worth, in
round figures, £3-5m.
Mr and Mrs White also farmed Rexton Farm as part of their partnership
business. This farm also comprised over 300 acres. Rexton Farm was
10 miles from Blagroves Farm, but the two were run as a single unit. Rexton
was part of the Willett estate. Mr White's father bought this estate in 1971
at an advantageous price, mainly with the assistance of borrowings. Later
he transferred the estate into the joint names of himself and his three sons.
The four of them held the estate in equal shares. Mr White's share of the
C cost of borrowing, in the form of interest and endowment premiums, was
met, through a tenancy agreement, by the Whites' farming partnership. In
1993 Mr White acquired Rexton Farm, subject to a mortgage debt of
£137,000, as his partitioned share of the Willett estate. Rexton Farm, as
distinct from the farming business carried on at the farm, was held in
Mr White's sole name. Unlike Blagroves Farm, it was not in joint names,
nor was it treated as belonging to the Whites' partnership. Rexton Farm was
worth £1-25111.
Mr and Mrs White had also made pension provision for themselves.
A substantial mortgage was outstanding on both farms. After deduction of
estimated liabilities for capital gains tax and costs of sale, the overall net
worth of Mr and Mrs White's assets was, in round figures, £4'6m. This
comprised, on the figures found and used by the judge: Mrs White's sole
£ property: £193,300 (mostly pension provision); her share of property owned
jointly, either directly or through the partnership: £1,334,000; Mr White's
share of jointly-owned property: £1,334,000; and Mr White's sole property:
£1,783,500 (mostly Rexton Farm).

The proceedings
The applications proceeded at all stages on a "clean break" basis.
Holman J decided that Mrs White reasonably required £980,000. This was
to be satisfied by payment of £800,000 and by her keeping her sole assets.
On being paid this amount, Mrs White was to transfer all the jointly owned
assets to Mr White. Thus, under this order, Mrs White was to receive
slightly over one-fifth of their total assets.
Holman J's reasoning can be summarised as follows. Neither party had
C any earning capacity outside farming. Mrs White's wish to have enough
money to enable her to buy a farm of her own was not a reasonable
requirement. It was unwise and unjustifiable to break up the existing,
established farming enterprise so that she could embark, much more
speculatively, on another. Her housing and financial needs were a
farmhouse type of home, with stabling and 25 acres of land for her horses,
costing £425,000. She needed a net annual spendable income of £40,000.
Capitalised, having due regard to her age, a net income of this amount
called for a Duxbury fund of £550,000. The Duxbury label is derived
from the decision of the Court of Appeal, Duxbury v Duxbury (Note)
[1992] Fam 62, where this type of fund was first described. This provision
for Mrs White would leave Mr White with an amount exceeding his
602
White v White (HL(E)) [2001)1 AC
Lord Nicholls of Birkenhead

reasonable requirements simply in terms of a home and income. But, A

additionally, he reasonably required to be able to continue farming in a
worthwhile way. The financial contributions from his family made this
reasonable.
Mrs White appealed to the Court of Appeal [1999] Fam 304. Her appeal
was successful. The Court of Appeal (Butler-Sloss, Thorpe and Mantell LJJ)
increased the amount of her payment from £800,000 to £1-5111. On the
judge's figures, and after deducting £310,000, representing the parties' costs
in both courts, this meant that Mrs White's share of the total assets would be
increased to about two-fifths. Thorpe LJ regarded the farming partnership
as the dominant feature in the case. Mrs White was entitled to use her share
as she thought fit. Only in so far as she sought additional capital from
Mr White was the judge entitled to evaluate critically the use to which such
additional capital was proposed to be put. There was no fairness in an c
outcome which involved a transfer of property order in favour of Mr White.
The court did not have the material to assess how much Mrs White would
have been entitled to receive on dissolution of the partnership. But, having
regard to the parties' contributions and the goal of overall fairness, the
provision for Mrs White should be increased by a further £700,000.
Mantell LJ agreed. Butler-Sloss LJ considered that Mrs White was entitled
to more than her partnership share, to recognise the contribution she made
to the family as wife and mother over and above her partnership role in the
farming business. Mr White would still be able to continue to farm, even if
on a reduced scale.
Mr White appealed to your Lordships' House, seeking the restoration of
Holman J's order. Mrs White cross-appealed. She seeks an order giving her
an equal share in all the assets. f

Features of the case

I have already noted that this was a clean break case, where the children
were grown up and independent. The available assets substantially
exceeded the amounts required by Mr and Mrs White for their financial
needs, in terms of a home and income for each of them. The general
observations I make later should be read with this in mind.
Two other features should be noted. First, and importantly, is the
equality of contribution made by Mr and Mrs White over their 33 years of
married life. The judge found that each party contributed a great deal of
effort to the marriage and the welfare of the family. Within the home it was
the wife who primarily brought up the children, and she also worked hard in
all sorts of ways on the farm. Mr White was a hardworking and active C
farmer. Holman J said:
"In truth this was a marital and also a business partnership in which,
by their efforts and commitment, each contributed to the full for 33 years,
and any attempt to weigh the respective contributions of their effort is idle
and unreal."
Thus, and this is itself a notable aspect of the equality of contribution, in this
case the business partnership was a reality.
A second feature, although of less importance, is that the assets of
Mr and Mrs White did not derive wholly from their own efforts. Without
the initial loan of £14,000 from Mr White's father, the young couple would
 603
[2001] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A not have been able to acquire their own farm when they did. The
advantageous terms on which Mr White acquired Rexton Farm stemmed
from his father's purchase of the Willett estate.
Against this background I turn to the statutory provisions.

The statutory provisions

6 The court's powers to make financial provision on divorce derive from
statute. In 1970 the statutory provisions were outdated and inadequate.
They were primarily concerned with income for the maintenance of spouses
and children. The property adjustment provisions were limited. They were
first enacted in the middle of the 19th century, and so they reflected the
values of male-dominated Victorian society. Essentially, the property
adjustment provisions comprised power to order property to be settled on
the other spouse and the children, and power to vary ante-nuptial and post-
nuptial settlements. The power to order a settlement dated back to the
Matrimonial Causes Act 1857 (20 & 21 Vict c 85), the statute which
supplanted the jurisdiction of the old ecclesiastical courts and set up the new
Court for Divorce and Matrimonial Causes. The power was exercisable
against a wife whose adultery, cruelty or desertion had founded the divorce.
D It was seldom used. There was no power to make a corresponding order
against a husband. This power was augmented in 1963 by power to order
payment of a lump sum by either spouse. This power also was not much
used.
The power to vary settlements originated in the Matrimonial Causes Act
1859 (22 & 23 Vict c 61). The courts did their best to stretch this power to
f accommodate modern needs, but there is a limit to judicial creativity. The
courts did not confine "settlement" to formal trust deeds. The expression
was taken to include any property acquired by the husband and wife except
property acquired by one of them alone under an out-and-out disposition.
This produced the striking anomaly that if the matrimonial home was
bought in joint names there was a settlement which could be varied, but not
if the house was owned by one of them alone.
F
These and other problems were considered in a report of the Law
Commission prepared in 1969 under the chairmanship of Scarman J: see
Family Law—Report on Financial Provision in Matrimonial Proceedings
(Law Com No 25). An overall rationalisation of the court's powers was
needed urgently.
The Matrimonial Proceedings and Property Act 1970 made a fresh start.
Q The powers of the court were greatly extended. The relevant provisions in
the 1970 Act were re-enacted in substantially similar terms in Part II of the
Matrimonial Causes Act 1973. Sections 23 and 24 of the Matrimonial
Causes Act 1973 empower the court, on granting a decree of divorce and in
certain other circumstances, to make financial provision orders and
property adjustment orders. Financial provision orders, under section 23,
include orders that one party to the marriage shall make payments to the
other party. The payments may be periodical, either secured or unsecured,
or lump sums. Property adjustment orders, under section 24, include
orders that one party to the marriage shall transfer property to the other
party. Section 24A empowers the court to make ancillary orders for the
sale of property.
604
White v White (HL(E)) [2001] 1 AC
Lord Nicholls of Birkenhead

Section 25, as substituted by section 3 of the Matrimonial and Family A

Proceedings Act 1984, sets out the familiar list of matters to which the court
is to have regard in deciding how to exercise these powers. Section 25(1)
provides that it is the duty of the court in deciding whether, and how, to
exercise these powers to have regard to all the circumstances of the case.
First consideration is to be given to the welfare of any child of the family
under the age of 18. Section 25(2) provides that, as regards the exercise of
these powers in relation to a party to the marriage, the court shall in
particular have regard to:
"(a) the income, earning capacity, property and other financial
resources which each of the parties to the marriage has or is likely to have
in the foreseeable future, including in the case of earning capacity any
increase in that capacity which it would in the opinion of the court be
reasonable to expect a party to the marriage to take steps to acquire;
(b) the financial needs, obligations and responsibilities which each of the
parties to the marriage has or is likely to have in the foreseeable future;
(c) the standard of living enjoyed by the family before the breakdown of
the marriage; (d) the age of each party to the marriage and the duration of
the marriage; (e) any physical or mental disability of either of the parties
to the marriage; (f) the contributions which each of the parties has made D
or is likely in the foreseeable future to make to the welfare of the family,
including any contribution by looking after the home or caring for the
family; (g) the conduct of each of the parties, if that conduct is such that it
would in the opinion of the court be inequitable to disregard it; (h). . . the
value to each of the parties to the marriage of any benefit. . . which, by
reason of the dissolution or annulment of the marriage, that party will
lose the chance of acquiring."
Section 25 A requires the court to consider the appropriateness of a "clean
break". Sections 25B-25D, inserted by section 166(1) of the Pensions Act
1995, make provision regarding benefits under pension schemes. They are
not material in the present case.
As originally enacted in 1970, in section 5(1) of the Matrimonial
Proceedings and Property Act 1970, the list of factors to be taken into
account contained a tailpiece. The tailpiece declared what should be the
objective of the court when exercising the statutory powers to make
financial provision orders and property adjustment orders. The court was so
to exercise these powers:
"as to place the parties, so far as it is practicable and, having regard to
their conduct, just to do so, in the financial position in which they would
have been if the marriage had not broken down and each had properly
discharged his or her financial obligations and responsibilities towards
the other."
This tailpiece was later deleted from the legislation, and nothing inserted in
its place. In consequence, the legislation does not state explicitly what is to
be the aim of the courts when exercising these wide powers. Implicitly, the
objective must be to achieve a fair outcome. The purpose of these powers is
to enable the court to make fair financial arrangements on or after divorce in
the absence of agreement between the former spouses: see Thorpe LJ in
Dart v Dart [1996] 2 FLR 286, 294. The powers must always be exercised
 605
[2001] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A with this objective in view, giving first consideration to the welfare of the
children.

Equality
Self-evidently, fairness requires the court to take into account all the
circumstances of the case. Indeed, the statute so provides. It is also self-
e evident that the circumstances in which the statutory powers have to be
exercised vary widely. As Butler-Sloss LJ said in Dart v Dart [1996]
2 FLR 286, 303, the statutory jurisdiction provides for all applications for
ancillary financial relief, from the poverty stricken to the multi-millionaire.
But there is one principle of universal application which can be stated with
confidence. In seeking to achieve a fair outcome, there is no place for
discrimination between husband and wife and their respective roles.
C Typically, a husband and wife share the activities of earning money, running
their home and caring for their children. Traditionally, the husband earned
the money, and the wife looked after the home and the children. This
traditional division of labour is no longer the order of the day. Frequently
both parents work. Sometimes it is the wife who is the money-earner, and
the husband runs the home and cares for the children during the day. But
D whatever the division of labour chosen by the husband and wife, or forced
upon them by circumstances, fairness requires that this should not prejudice
or advantage either party when considering paragraph (/"), relating to the
parties' contributions. This is implicit in the very language of paragraph (f):
"the contributions which each . . . has made or is likely . . . to make to the
welfare of the family, including any contribution by looking after the home
or caring for the family". (Emphasis added.) If, in their different spheres,
£ each contributed equally to the family, then in principle it matters not which
of them earned the money and built up the assets. There should be no bias in
favour of the money-earner and against the home-maker and the child-carer.
There are cases, of which the Court of Appeal decision in Page v Page (1981)
2 FLR 198 is perhaps an instance, where the court may have lost sight of this
principle.
F A practical consideration follows from this. Sometimes, having carried
out the statutory exercise, the judge's conclusion involves a more or less
equal division of the available assets. More often, this is not so. More often,
having looked at all the circumstances, the judge's decision means that one
party will receive a bigger share than the other. Before reaching a firm
conclusion and making an order along these lines, a judge would always be
well advised to check his tentative views against the yardstick of equality of
C division. As a general guide, equality should be departed from only if, and to
the extent that, there is good reason for doing so. The need to consider and
articulate reasons for departing from equality would help the parties and the
court to focus on the need to ensure the absence of discrimination.
This is not to introduce a presumption of equal division under another
guise. Generally accepted standards of fairness in a field such as this change
and develop, sometimes quite radically, over comparatively short periods of
time. The discretionary powers, conferred by Parliament 30 years ago,
enable the courts to recognise and respond to developments of this sort.
These wide powers enable the courts to make financial provision orders in
tune with current perceptions of fairness. Today there is greater awareness
of the value of non-financial contributions to the welfare of the family.
606
White v White (HL(E)) [2001] 1 AC
Lord Nicholls of Birkenhead

There is greater awareness of the extent to which one spouse's business A

success, achieved by much sustained hard work over many years, may have
been made possible or enhanced by the family contribution of the other
spouse, a contribution which also required much sustained hard work over
many years. There is increased recognition that, by being at home and
having and looking after young children, a wife may lose for ever the
opportunity to acquire and develop her own money-earning qualifications
and skills. In Porter v Porter [1969] 1 WLR 1155, 1159, Sachs LJ observed
that discretionary powers enable the court to take into account "the human
outlook of the period in which they make their decisions". In the exercise of
these discretions "the law is a living thing moving with the times and not a
creature of dead or mori bund ways of thought".
Despite these changes, a presumption of equal division would go beyond
the permissible bounds of interpretation of section 25. In this regard c
section 25 differs from the applicable law in Scotland. Section 10 of the
Family Law (Scotland) Act 1985 provides that the net value of matrimonial
property shall be taken to be shared fairly between the parties to the
marriage when it is shared equally or in such other proportions as are
justified by special circumstances. Unlike section 10 of the Family Law
(Scotland) Act 1985, section 25 of the 1973 Act makes no mention of an
equal sharing of the parties' assets, even their marriage-related assets.
A presumption of equal division would be an impermissible judicial gloss
on the statutory provision. That would be so, even though the presumption
would be rebuttable. Whether there should be such a presumption in
England and Wales, and in respect of what assets, is a matter for
Parliament.
It is largely for this reason that I do not accept Mr Turner's invitation to £
enunciate a principle that in every case the "starting point" in relation to a
division of the assets of the husband and wife should be equality. He sought
to draw a distinction between a presumption and a starting point. But a
starting point principle of general application would carry a risk that in
practice it would be treated as a legal presumption, with formal
consequences regarding the burden of proof. In contrast, it should be
F
possible to use equality as a form of check for the valuable purpose already
described without this being treated as a legal presumption of equal
division.

Financial resources and financial needs

I turn next to a point where the current state of the law is not altogether
satisfactory. That this is so emerges clearly from the decision of the Court C
of Appeal in Dart v Dart [1996] 2 FLR 286. The point concerns the
relationship of paragraph (a) and paragraph (b) in big money cases.
Paragraph (a) concerns the available financial resources of each of the
parties. Paragraph (b) is concerned with the "financial needs, obligations
and responsibilities" of each of the parties. In practice, paragraph (b) seems
to have become largely subsumed into a wider, judicially-developed concept
of "reasonable requirements". This wider concept appears, in turn, to have
displaced consideration of the parties' available resources as a factor in its
own right.
This development had its origins in a decision of the Court of Appeal in
O'D v O'D [1976] Fam 83 where the alluring phrase "reasonable
 607
[2001 ] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A requirements" was coined. In that case Ormrod LJ, at p 91, considered the
wife's position, "not from the narrow point of 'need', but to ascertain her
reasonable requirements". A similar approach was adopted a few years
later, in Page v Page 2 FLR 198, 201. This was a case where there was
enough capital to provide adequately for both husband and wife. Not
surprisingly, the court held that when considering the needs and obligations
of the parties a broad view could be taken. Ormrod LJ, whose judgments
are a valuable source of much of the jurisprudence in this area of the law,
said:
"In a case such as this 'needs' can be regarded as equivalent to
'reasonable requirements', taking into account the other factors such as
age, health, length of marriage and standard of living."
C The third case in this trilogy of cases where resources exceeded financial
needs is Preston v Preston [1982] Fam 17. Ormrod LJ, at p 25, set out a list
of general propositions. His second proposition was:
"the word 'needs' in section 25(i)(b) in relation to the other provisions
in the subsection is equivalent to 'reasonable requirements', having
regard to the other factors and the objective set by the concluding words
D of the subsection . . ."
Rightly or wrongly, these passages have been understood as saying that
reasonable requirements is a more extensive concept than financial needs.
This seems then to have led to a practice whereby the court's appraisal of a
claimant wife's reasonable requirements has been treated as a determinative,
and limiting, factor on the amount of the award which should be made in her
E favour.
The soundness of this approach was considered by the Court of Appeal in
Dart v Dart [1996] 2 FLR 286. Thorpe LJ, who has much experience in this
field, gave the leading judgment. He sought to reconcile the existing practice
with the statutory provisions: see p 296F-H. Reasonable requirements are
more extensive than needs. What a person requires is likely to be greater
than what that person needs. The objective appraisal of what the applicant
requires must have regard to the other criteria of the section, including
what is available, the parties' accustomed standard of living, their age and
state of health and "perhaps less obviously" the duration of the marriage,
contributions and pension rights. Thorpe LJ said, at p 296:
"Used thus the consideration of needs ceases to be paramount or
determinative but an elastic consideration that does not exclude the
influence of any of the o t h e r s . . . in a big money case where the wife has
played an equal part in creating the family fortune it would not be
unreasonable for her to require what might be even an equal share." (My
emphasis.)
This conclusion, I have to say, seems to me worlds away from any ordinary
meaning of financial needs. Moreover, this conclusion gives an artificially
strained meaning to reasonable requirements, the more especially as this
phrase was adopted originally as a synonym for financial needs.
The other two members of the Court of Appeal were more doubtful. Peter
Gibson LJ, at p 302, questioned the correctness of an approach which
determines the quantum of an award by reference only to the reasonable
608
White v White (HL(E)) [2001] 1 AC
Lord Nicholls of Birkenhead

requirements of the applicant. Butler-Sloss LJ, with her immense experience A

of family work, shared Peter Gibson LJ's doubts: see p 305. She wondered
whether the courts may not have imposed too restrictive an interpretation
upon the words of section 25 and given too great weight to reasonable
requirements over other criteria set out in the section. She considered that if
spouses are in business together, the traditional "reasonable requirements"
approach to a wife's application for ancillary relief is not the most
appropriate method to arrive at the post-divorce adjustment of family
finances.
Subsequently this question arose again, in Conran v Conran [1997]
zFLR 615. Wilson J was of the view that, notwithstanding the observations
of Thorpe LJ in the Dart case, one could not sensibly fit an allowance for
contribution into an analysis of a wife's needs. That would do violence to
language and to section 25(2), where contribution and needs are set out as C
different matters to which the court is required to have regard: see
pp 623-624.
Thus, as matters stand, there is a degree of confusion. I venture to think
this has arisen because the courts have departed from the statutory
provisions. The statutory provisions lend no support to the idea that a
claimant's financial needs, even interpreted generously and called
reasonable requirements, are to be regarded as determinative. Another
factor to which the court is bidden to have particular regard is the available
resources of each party. As my noble and learned friend, Lord Hoffmann,
observed in Piglowska v Pigslowski [1999] 1 WLR 1360, 1379,
section 25(2) does not rank the matters listed in that subsection in any kind
of hierarchy. The weight, or importance, to be attached to these matters
depends upon the facts of the particular case. But I can see nothing, either f
in the statutory provisions or in the underlying objective of securing fair
financial arrangements, to lead me to suppose that the available assets of
the respondent become immaterial once the claimant wife's financial needs
are satisfied. Why ever should they? If a husband and wife by their joint
efforts over many years, his directly in his business and hers indirectly at
home, have built up a valuable business from scratch, why should the
claimant wife be confined to the court's assessment of her reasonable
requirements, and the husband left with a much larger share? Or, to put the
question differently, in such a case, where the assets exceed the financial
needs of both parties, why should the surplus belong solely to the husband?
On the facts of a particular case there may be a good reason why the wife
should be confined to her needs and the husband left with the much larger
balance. But the mere absence of financial need cannot, by itself, be a C
sufficient reason. If it were, discrimination would be creeping in by the
back door. In these cases, it should be remembered, the claimant is usually
the wife. Hence the importance of the check against the yardstick of equal
division.
There is much to be said for returning to the language of the statute.
Confusion might be avoided if courts were to stop using the expression
"reasonable requirements" in these cases, burdened as it is now with the
difficulties mentioned above. This would not deprive the court of the
necessary degree of flexibility. Financial needs are relative. Standards of
living vary. In assessing financial needs, a court will have regard to a
person's age, health and accustomed standard of living. The court may also
 609
[2001] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A have regard to the available pool of resources. Clearly, and this is well
recognised, there is some overlap between the factors listed in section 25(2).
In a particular case there may be other matters to be taken into account as
well. But the end product of this assessment of financial needs should be
seen, and treated by the court, for what it is: only one of the several factors to
which the court is to have particular regard. This is so, whether the end
product is labelled financial needs or reasonable requirements. In deciding
what would be a fair outcome the court must also have regard to other
factors such as the available resources and the parties' contributions. In
following this approach the court will be doing no more than giving effect to
the statutory scheme.

The Duxbury paradox

This approach also furnishes a solution to the so-called Duxbury paradox
in this type of case. In the present case Holman J referred to "the well known
paradox that the longer the marriage and hence the older the wife, the less
the capital sum required for a Duxbury type fund". A Duxbury calculation
is, no doubt, useful as a guide in assessing the amount of money required to
provide for a person's financial needs. It is a means of capitalising an income
D requirement. But that is all. As I have been at pains to emphasise, financial
needs are only one of the factors to be taken into account in arriving at the
amount of an award. The amount of capital required to provide for an older
wife's financial needs may well be less than the amount required to provide
for a younger wife's financial needs. It by no means follows that, in a case
where resources exceed the parties' financial needs, the older wife's award
will be less than the younger wife's. Indeed, the older wife's award may be
substantially larger.

The next generation

I must mention a further matter on which, through her counsel,
Mrs White advanced submissions. It arises out of observations made in
Page v Page 2 FLR 198. Ormrod LJ, at p 201, expressed the view that when
F
assessing the amount of a lump sum provision under section 25 it is not
legitimate to take into account the wife's wish to be in a position to make
provision by will for her adult children. Dunn LJ, at p 203, made a similar
statement. Ormrod LJ repeated this in his third general proposition in
Preston v Preston [1982] Fam 17, 25. Brandon LJ was of the same view: see
P36.
C I agree with this proposition to a strictly limited extent. I agree that a
parent's wish to be in a position to leave money to his or her children would
not normally fall within paragraph (b) as a financial need, either of the
husband or of the wife. But this does not mean that this natural parental
wish is wholly irrelevant to the section 25 exercise in a case where resources
exceed the parties' financial needs. In principle, a wife's wish to have money
so that she can pass some on to her children at her discretion is every bit as
weighty as a similar wish by a husband. A Duxbury type fund is intended to
provide money for living expenses but not more. The amount of the
Duxbury fund is calculated on the basis that the capital as well as the income
will be used. The calculation assumes that nothing will be left when the wife
dies. This was put graphically by Peter Singer QC in a challenging paper
610
White v White (HL(E)) [2001] 1 AC
Lord Nicholls of Birkenhead

presented to the Family Law Bar Association in May 1992. The Duxbury A
fund calculation involves using income and ultimately exhausting the capital
at the theoretical point when the wife would down her last glass of
champagne and expire as predicted by the life tables.
In my view, in a case where resources exceed needs, the correct approach
is as follows. The judge has regard to all the facts of the case and to the
overall requirements of fairness. When doing so, the judge is entitled to have
in mind the wish of a claimant wife that her award should not be confined to
living accommodation and a vanishing fund of capital earmarked for living
expenses which would leave nothing for her to pass on. The judge will give
to that factor whatever weight, be it much or little or none at all, he
considers appropriate in the circumstances of the particular case.

Inherited money and property C

I must also mention briefly another problem which has arisen in the
present case. It concerns property acquired during the marriage by one
spouse by gift or succession or as a beneficiary under a trust. For
convenience I will refer to such property as inherited property. Typically, in
countries where a detailed statutory code is in place, the legislation
distinguishes between two classes of property: inherited property, and D
property owned before the marriage, on the one hand, and "matrimonial
property" on the other hand. A distinction along these lines exists, for
example, in the Family Law (Scotland) Act 1985 and the (New Zealand)
Matrimonial Property Act 1976.
This distinction is a recognition of the view, widely but not universally
held, that property owned by one spouse before the marriage, and inherited
property whenever acquired, stand on a different footing from what may
be loosely called matrimonial property. According to this view, on a
breakdown of the marriage these two classes of property should not
necessarily be treated in the same way. Property acquired before marriage
and inherited property acquired during marriage come from a source wholly
external to the marriage. In fairness, where this property still exists, the
spouse to whom it was given should be allowed to keep it. Conversely, the F
other spouse has a weaker claim to such property than he or she may have
regarding matrimonial property.
Plainly, when present, this factor is one of the circumstances of the case.
It represents a contribution made to the welfare of the family by one of the
parties to the marriage. The judge should take it into account. He should
decide how important it is in the particular case. The nature and value of the r
property, and the time when and circumstances in which the property was
acquired, are among the relevant matters to be considered. However, in the
ordinary course, this factor can be expected to carry little weight, if any, in a
case where the claimant's financial needs cannot be met without recourse to
this property.

The decision ofhiolman J H

I turn now to the decision of Holman J In a careful and lucid judgment, he
faithfully followed the approach of Thorpe LJ in Dart v Dart [1996]
2 FLR 286. He assessed the parties' reasonable requirements and on that
basis made his award. That was the determinative factor. For reasons
 611
[2001] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A already given, I consider that, through no fault on his part, he was mistaken
in taking this course.
Indeed, the present case is a good illustration of the unsatisfactory results
which can flow from the reasonable requirements approach. Even if Rexton
were excluded, Mr and Mrs White's financial resources exceeded their
financial needs. But Mrs White's award was confined to her financial needs,
while Mr White, whose financial needs were no greater, scooped the entirety
of the rest of the pool of resources. Even if Rexton were wholly left out of
account, Mr White still received roughly two-thirds of their assets. The
initial cash contribution made by Mr White's father in the early days cannot
carry much weight 33 years later.

The decision of the Court of Appeal

c
In my view, therefore, the judge misdirected himself. Accordingly, the
Court of Appeal was entitled to exercise afresh the statutory discretionary
powers. Both parties criticised the manner in which the Court of Appeal did
so. Mr White's primary complaint was that the Court of Appeal wrongly
departed from the reasonable requirements approach prescribed in Dart v
Dart [1996] 2 FLR 286. For reasons already given, I do not accept this
D criticism.
His next criticism was that the members of the Court of Appeal placed
undue emphasis on the financial worth of each party on the dissolution of
the partnership. This was a wrong approach, as was the view that the court
should not exercise its statutory powers unless there was a "manifest case for
intervention". I agree that both Thorpe LJ and Butler-Sloss LJ did attach
considerable importance to the wife's entitlement under the partnership.
E There are observations, particularly in the judgment of Thorpe LJ, which,
read by themselves, might suggest that in this regard the clock was being
turned back to the pre-1970 position. Then courts often had to attempt to
unravel years of matrimonial finances and reach firm conclusions on who
owned precisely what and in what shares. The need for this type of
investigation was swept away in 1970 when the new legislation gave the
F court its panoply of wide discretionary powers. Since then, the courts have
not countenanced parties incurring costs which would be disproportionate
to the assistance the expenditure would give in carrying out the section 25
exercise.
All this is well established. So much so, that I cannot believe that either
Thorpe LJ or Butler-Sloss LJ intended to gainsay this approach. Indeed,
Butler-Sloss LJ stated expressly that what she had in mind, where parties
C were in business together, was a broad assessment of the financial position
and not a detailed partnership account. She rightly noted that, even in such a
case, the parties' proprietorial interests should not be allowed to dominate
the picture: see [1999] Fam 304, 320. If Thorpe LJ went further than this, he
went too far.
The wisdom of this approach is confirmed by the substantial body of
additional evidence produced for the first time in your Lordships' House.
The new material included the Whites' partnership agreement. From this
evidence it emerged that, if a strict valuation of the parties' shares on a
dissolution of the partnership were needed, several disputes would have to
be resolved: disputes about the assets and liabilities of the partnership, a
dispute about the value of the milk quota, and a dispute over the proper
612
White v White (HL(E)) [2001] 1 AC
Lord Nicholls of Birkenhead

interpretation of the somewhat obscure retirement provisions in the A

partnership agreement. I do not think any of these differences need be
resolved. The House can, and should, proceed on the basis of the factual
findings of Holman J.
A further contention advanced for Mr White was that there was no basis
on which the court could increase Mrs White's award to an amount
substantially in excess of her share of their joint assets. Here again, I am „
unable to agree. As one would expect, both Thorpe LJ and Butler-
Sloss LJ had in mind all the available assets. They had in mind that the
contribution made by Mr White's father was significant. Both of them
referred to Mrs White's dual role as business partner and as wife and
mother. They also had in mind the overall goal of fairness, a consideration
specifically mentioned by Thorpe LJ. The amount of their award was well
within the ambit of the discretion which the Court of Appeal was exercising <-
afresh.
For the same reason, I cannot accept Mrs White's contrary contention
that the assets should have been divided equally.
Mrs White advanced the further argument that if proprietorial interests
were to be looked at, the court should have conducted a full and detailed
investigation. I have already stated that such an investigation was not called Q
for. Her next submission was that the Court of Appeal should not have
adopted a selective revaluation of only one of the assets, the milk quota, and
then without proper evidence. This criticism lacks substance. The Court of
Appeal was understandably anxious to make any necessary major
adjustments in the figures but without putting the parties to further expense.
As matters have since turned out, the judge's figures have to be adjusted
downwards, by a substantial amount, in any event. The parties' untaxed
costs of their appeals to this House are estimated at the appalling sum of
£530,000. This exceeds Thorpe LJ's estimate of the reduction in value of
milk quota since the decision of Holman J. Whatever may be the rights and
wrongs of the amount of the milk quota revaluation, the course taken by
Court of Appeal did not prejudice Mrs White.
Finally, Mrs White criticised the use of net values, arrived at after F
deducting estimates of the costs and capital gains tax likely to be incurred if
the farms were sold. Mr White still owns and uses the farms. The farms
have not been sold. Counsel submitted that the use of net values in this
situation should be discontinued. I do not agree. As with so much else in
this field, there can be no hard and fast rule, either way. When making a
comparison it is important to compare like with like, so far as this may be c
possible in the particular case. In the present case a comparison based on net
values is fairer than would be a comparison of Mrs White' cash award and
the gross value of the farms. Under her award Mrs White will have money.
She can invest or use it as she pleases. Mr White's equivalent, as a cash sum,
is the net value of the farms. The farms have to be sold before he can have
money to invest or use in other ways. What will be his financial position if
he is able to retain the farms or parts of them? Will he better off financially?
Dairy farming is currently languishing in the doldru.ns. On the evidence
there is no reason to suppose that the farms are likely to yield a better
financial return at present than the investment return to be expected if
Mr White sold up and invested the net proceeds.
 613
[2001] 1 AC White v White (HL(E))
Lord Nicholls of Birkenhead

A My conclusion is that, applying the principles expounded in Piglowska v

Pigslowski [1999] 1 WLR 1360, there is no ground entitling this House to
interfere with the Court of Appeal's exercise of discretion. I would dismiss
the appeals of both Mr and Mrs White.

LORD HOFFMANN My Lords, I have had the advantage of reading in

draft the speech which has been prepared by my noble and learned friend,
Lord Nicholls of Birkenhead. I agree with it, and for the reasons which he
has given I too would dismiss both appeals.

LORD COOKE OF THORNDON My Lords, having had the advantage

of reading in draft the speech of my noble and learned friend, Lord Nicholls
of Birkenhead, I am in full accord with its tenor and believe that it will do
Q much to enable English matrimonial property law to meet the requirements
of contemporary society. What little I have to add is mainly by way of
emphasis and supplement.
Lord Nicholls mentions the detailed statutory regime prescribed in New
Zealand by the Matrimonial Property Act 1976 as a contrast with the more
broadly-textured discretionary jurisdiction conferred in England and Wales
by sections 23, 24 and 25 of the Matrimonial Causes Act 1973 a s amended.
D
One of the reasons that I think led the New Zealand Parliament into so
much detail was disappointment with the performance of the courts in
exercising jurisdiction under previous more generally-expressed legislation.
In particular it was thought that too often the non-monetary contributions
of a wife and mother were undervalued. If the spirit of my noble and
learned friend's speech is followed by the English courts, there should not
£ be solid ground for such criticism here. This may be shown by a
comparison.
In outline the scheme of the New Zealand 1976 Act is that after a
marriage of more than three years, the values of the matrimonial home
(whenever acquired) and the family chattels are shared equally unless there
are extraordinary circumstances rendering equality repugnant to justice.
Other matrimonial property is shared equally unless one party's
contribution to the marriage partnership has clearly been greater; the
bringing into the matrimonial partnership of separate property acquired
by one spouse by inheritance or gift may rank as a contribution. If the
New Zealand regime had applied to the facts of the present case, I would
expect an award to the wife of certainly no less than 40% of the total
available property, which is approximately what the Court of Appeal have
C ordered.
While a fairly broad discretionary jurisdiction does have the merit of
flexibility, it will not be satisfactory unless exercised with a reasonable
degree of consistency. On this aspect attention was focused in argument on
Mallet v Mallet (1984) 156 CLR 605, since the Australian statutory regime
is similar in pattern to the English one. But not long after that decision a
somewhat differently constituted High Court of Australia took a somewhat
different approach in Norbis v Norbis (1986) 161 CLR 513. The story is
told by Dr Richard Ingleby of the Victorian Bar in a contribution to Family
Law Towards the Millennium: Essays for P M Bromley, edited by Caroline
Bridge (Butterworths, London, 1997) at pp 404-405. In reproducing an
extensive passage, I omit the footnotes.
614
White v White (HL(E)) [2001] 1 AC
Lord Cooke of Thorndon

"During the first 20 years of its existence the Family Court of Australia A
has been engaged in a struggle between the Full Court and first instance
trial judges. The appellate court has sought to establish techniques to
control the exercise of discretion by first instance judges. The first of these
techniques was the creation of presumptions or guidelines for the exercise
of judicial discretion. The main battleground in the 1980s was section 79
of the Family Law Act 1975, which establishes a regime for the exercise of
judicial discretion in relation to the division of property in the names of
parties to a marriage equivalent to that in section 25 of the English
Matrimonial Causes Act 1973.
"Initially the High Court of Australia (being the highest court in the
land and the court to which appeals lie from the Full Court of the
Family Court) set itself against the Full Court. In Mallet Bell J at first
instance awarded Mrs Mallet 50% of the equity in the former C
matrimonial home, and 20% of the value of Mr Mallet's business assets.
On appeal by the wife the Full Court essentially held that Bell J had
paid insufficient attention to the method by which the business assets
had been accumulated, and substituted an order for all assets to be
divided evenly. The High Court rejected the Full Court's approach
because, according to the majority, it was based on 'an erroneous
understanding of the operation of section 79(4) of the [Family Law] Act
expressed in the [Full Court's] proposition that "equality . . . is a
convenient starting point where the matter at issue involves a long
marriage"'. The High Court held that a presumption of equality as
between the contributions of a homemaker and an income earner was
an unacceptable fetter 'on the discretionary power which Parliament
has left largely unfettered'. E
"Deane J (as he then was) gave the sole dissenting judgment in the
Mallet High Court, and the importance of the dissent was that it became
the majority view when the High Court had the opportunity to reconsider
the question two years later. First, Deane J took care to point out that the
Full Court had not sought to fetter the exercise of discretion by trial
judges and had indeed confined the application of the standard to a
particular category of marriage: 'there is no "principle" in family law that
equality is equity . . . where the court is given a discretion it cannot lay
down principles for to do so would be to fetter its own discretion . . . the
cases which refer to equality do not lay it down as a principle but merely
as a convenient starting point where the matter at issue involves a long
marriage'. Deane J saw the 'standard' as, 'the enunciation' not of a legal
principle or presumption but of a general counsel of experience on the C
subject of what constitutes, in some types of case, an appropriate starting
point for the determination of the particular order which should be made
in the particular circumstances of the individual case.
"Two years later, in Norbis, the question of guidelines arose again, this
time in the context of whether the courts should assess contributions to
property on a global or asset-by-asset basis. In Norbis, Deane J's
repetition of his suggestion of a norm which provided a guide to first
instance judges without the same binding nature of a precedent received
support from Mason J (who had been in the majority in Mallet), and
Brennan J (as he then was), who was not a member of the Mallet High
Court. This meant that Wilson and Dawson JJ were now in the minority.
 615
[2001] 1 AC White v White (HL(E))
Lord Cooke of Thorndon

A The High Court was now supportive of the Full Court's attempts to
uphold 'consistency in judicial adjudication . . ..the antithesis of arbitrary
and capricious decision-making . . . an important countervailing
consideration supporting the giving of guidance by appellate courts'. As
Brennan J put it, 'The only compromise between idiosyncrasy in the
exercise of discretion and an impermissible limitation of the scope of the
discretion is to be found in the development of guidelines from which a
judge may depart when it is just and equitable to do so—guidelines which
are not rules of universal application, but which are generally productive
of just and equitable orders.'
"Since the High Court's decision in Norbis, an increasingly assertive
Full Court has arguably increased the status of guidelines. This has been
done, not by holding that it is an appellable error to depart from a
C guideline, but by holding that a trial judge has a duty to give adequate
reasons for such a departure . . ."
I agree with the majority in Norbis. In this and other fields it is part of the
function of a court of final appeal to lay down from time to time, after
considering the experience and opinions of more specialised courts,
guidelines assisting judges, legal advisers and parties to resolve disputes.
D There may be and is in the English Act no statutory presumption or prima
facie rule, but there is no reason to suppose that in prescribing relevant
considerations the legislature had any intention of excluding the
development of general judicial practice. I doubt whether the labels
"yardstick" or "check" will produce any result different from "guidelines" or
"starting point".
An incidental advantage of such an approach is that it may save costs.
The magnitude of the costs reported in this case (evidently counsel's fees
were not the major items) is a very bad advertisement for the legal system.
The most important point, in my opinion, in the speech of my noble and
learned friend, Lord Nicholls, is his proposition that, as a general guide,
equality should be departed from only if, and to the extent that, there is good
reason for doing so. I would gratefully adopt and underline it. Widespread
F opinion within the Commonwealth would appear to accept that this
approach is almost inevitable, whether the regime be broad or detailed in its
statutory provisions.
In the present case, bearing in mind that it was a marriage of more than
30 years, that there were three children and that the wife was an active
partner in the farming business as well as meeting the responsibilities of wife
and mother, the only plausible reason for departing from equality can be the
financial help given by the husband's father. I agree, however, that the
significance of this is diminished because over a long marriage the parties
jointly made the most of that help and because it was apparently intended at
least partly for the benefit of both. As Lord Simon of Glaisdale said, in
delivering the judgment of the Privy Council in a case under the former New
Zealand legislation:
H
"Initially a gift or bequest to one spouse only is likely to fall outside the
Act, because the other spouse will have made no contribution to it. But as
time goes on, and depending on the nature of the property in question, the
other spouse may well have made a direct or indirect contribution to its
retention:" Haldane v Haldane [1977] AC 673, 697.
616
White v White (HL(E)) [2001] 1 AC
Lord Cooke of Thorndon

My only doubt is whether the help from the husband's father should be A
seen as justifying a difference of the order of 20% in the overall shares of the
parties. I think that £i-5m was probably about the minimum that could
have been awarded to Mrs White without exposing the award to further
increase on further appeal. But I am prepared to accept that the figure was
one open to the Court of Appeal in the exercise of their discretion, and that
your Lordships should not interfere with it. So I would join in dismissing
both appeals.

LORD HOPE OF CRAIGHEAD My Lords, I have had the advantage of

reading in draft the speech which has been prepared by my noble and learned
friend, Lord Nicholls of Birkenhead. I agree with it, and for the reasons
which he has given I, too, would dismiss both appeals.

LORD HUTTON My Lords, I have had the advantage of reading in draft

the speech of my noble and learned friend, Lord Nicholls of Birkenhead.
I am in full agreement with it and, in particular, I agree with his opinion that
it is the duty of the court at first instance to arrive at a fair result by taking
into account not only the financial needs of the wife under section 25(2)^) of
the Matrimonial Causes Act 1973 as amended, but also to take into account
the financial resources of each of the parties under section 25(2)(a) and the D
contributions of each of the parties to the welfare of the family under
section 25(2)^) together with the other factors set out in the subsection.
Accordingly, I would also dismiss both appeals.

Appeal and cross-appeal dismissed

with costs.
E
Solicitors: Clarke Willmott & Clarke, Taunton; Payne Hicks Beach.
Reported by SHIRANIKHA HERBERT, Barrister