Overview

The House of Lords decision in White v White 2000 is a landmark case in redistribution of finances as well as property on divorce. This case involved a couple with assets exceeding £4.5m which was more than either needs for their reasonable requirements. It was held that the absence of financial need did not mean departing from a more generous settlement for an applicant in big money cases. This, therefore, enables the courts to make settlements reflecting the wealth of the parties, and not just their needs and requirements. However, it seems clear from Lord Nicholls' leading speech that he intended much of what he said to apply to all ancillary relief cases, and not just big money ones. Lord Nicholls said that in call cases, regardless of division of assets, a judge would always be well advised to check his tentative views (on distribution of assets) against the "yardstick of equality of division". This was not to introduce a presumption of equality in all cases, but "to ensure the absence of discrimination", for instance, between a wage earner, and a child-carer, thereby recognising the non-financial contribution of the parent caring for children.

History

White v White [2001] (House of Lords

House of Lords

The House of Lords is the upper house of the Parliament of the United Kingdom. Like the House of Commons, it meets in the Palace of Westminster....

) is a divorce

Divorce

Divorce is the final termination of a marital union, canceling the legal duties and responsibilities of marriage and dissolving the bonds of matrimony between the parties...

 (ancillary relief

Ancillary relief

In English law, an application for financial relief following the presentation of a petition for divorce, nullity or judicial separation is described as ancillary relief...

) case with regards to the court's wide discretion of lump sum award between Martin White and Pamela White who are both farmers and married in 1961. They were independent farmers prior marriage and continued farming in equal partnership thereafter. Their farming business in Blagroves Farm were a tremendous success and all land that was eventually acquired were held by the two of them jointly.

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 £2.2m to enable her to continue farming on her own. The judge found that the net assets were £4.6m, of which £1.5m belonged to the wife. He declined to break up the farming enterprise and, having capitalized the wife's income needs and assessed the cost of buying a 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 recognize that her contributions were the dominant factor in the balancing act required by section 25 of the Matrimonial Causes Act 1973, and that an award of approximately 40% of the total available net assets 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 £1.5m reflecting her contribution both to the business and to the family.

All consecutive appeals and cross appeals made by the husband and wife hereafter were dismissed.

Principles

This landmark case have set a number of vital legal principles that has been followed, observed, and used in many case.

Clean break

A clean break is an arrangement whereby the wife abandoned her right to claim monetary maintenance in return for a transfer by the husband of a capital asset

Capital asset

The term capital asset has three unrelated technical definitions, and is also used in a variety of non-technical ways.*In financial economics, it refers to any asset used to make money, as opposed to assets used for personal enjoyment or consumption...

, usually but not always, the matrimonial home, thus encouraging the parties to the marriage to put the past behind them.

However, in the case of Minton v Minton [1979], Lord Scarman's definition of a 'clean break' is such as "to begin a new life which is not overshadowed by the relationship which has broken down."

It is usually not possible to come to terms with clean break on divorce when there are children under the age of 18.

Statutory Provisions

Much of the legislations and statutes of this case involves the Matrimonial Causes Act 1973 especially the interpretation of section 23, 24, and 25.

Section 23 & 24

This provisions empowers the court to make financial and property (assets) provision orders when a decree of divorce is granted. Financial provision orders under section 23 include that one party to the marriage shall make payment to the other party, and the payments may be in secured (securities, bonds, shares) or unsecured, or in lump sums.

Section 24

This section empowers the court to order the sale of property for the purpose of ancillary relief.