Fielden & Anor v Cunliffe [2005] EWCA Civ 1508

[2005] EWCA Civ 1508

Case No B4/2005/0431

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM

HIS HONOUR JUDGE HOWARTH

CHANCERY DIVISION

Venue MANCHESTER DISTRICT REGISTRY, Royal Courts of Justice, Strand, London, WC2A 2LL

Date 06/12/2005

Before

LORD JUSTICE MUMMERY

LORD JUSTICE WALL

LORD JUSTICE MOORE-BICK

Between

JOHN ANTHONY HAIGH FIELDENAppellants

KATHRYN ANN GRAHAM (Executors of the Estate of John Derrick Cunliffe deceased)Appellant

MONIKA THERESIA GERDA CUNLIFFERespondent

Miss Penelope Reed (instructed by Messrs. Cobbetts - Solicitors) for Appellant

Miss Judith Bryant (instructed by Messrs Aughton Ainsworth - Solicitors) for Respondent

Hearing Hearing date : 25th October 2005

Judgment

Lord Justice Wall:

[1]Mr. John Fielden and Ms. Kathryn Graham are the executors of the will of John Derick Cunliffe deceased (hereinafter called “the deceased”). They appeal against an order made by His Honour Judge Howarth, sitting as a judge of the Chancery Division in Manchester on 15 February 2005 in proceedings instituted by the deceased’s widow, Monika Cunliffe under section 1(1)(a) of the Inheritance (Provision for Family and Dependants) Act 1975 (the 1975 Act). The order was that Mrs. Cunliffe be paid a lump sum of £800,000 out of the deceased’s estate in place of her interest as an object of the discretionary trust created by the deceased’s will. The lump sum was to be paid as to £200,000 within 28 days, but the order is silent as to the payment of the balance. The £200,000 has been paid. There are other ancillary orders, which are not material to this appeal.

[2]The judge refused the executors permission to appeal. The appellants’ notice was filed one day out of time on 2 March 2005, and on 26 April 2005, Thorpe LJ, on the papers, directed that the appellants’ application for permission to appeal should be listed for oral hearing on notice to Mrs. Cunliffe, with the appeal to follow immediately if permission was granted.

[3]At the outset of the hearing before us on 25 October 2005, we extended time for the filing of the appellants’ notice and gave permission to appeal. Having heard full argument, we reserved our decision.

The deceased’s will

[4]The deceased died, domiciled in England and Wales, on 11 November 2002 at the age of 66. Probate was granted out of the District Probate Registry of the High Court of Justice at Manchester on 11 June 2003. The estate was valued for probate purposes at £1,399,543.

[5]The deceased’s will was executed on 25 October 2001 (the will). It is expressed to have been made in contemplation of his marriage to Mrs. Cunliffe, which took place four days later on 29 October 2001. By his will, the deceased left his residuary estate on discretionary trusts for a class of beneficiaries which included;(1) his wife;

(2) the children and remoter issue of his brother Bernard Cunliffe who had died on 6 August 2001 (this class including Bernard’s son Victor Cunliffe, who in turn has three infant children);

(3) his gardener, George Isherwood;

(4) a friend, Caroline Perry;

(5) Diana Cunliffe, Bernard’s widow;

(6) the employees of Worsley Hall Nurseries and Garden Centre, which was the family business; and

(7) such additional beneficiaries as his trustees should appoint.

[6]The figure which the judge took as the net value of the estate for the purposes of the proceedings before him was £1.4 million. Shortly before the hearing, the executors made an open offer to Mrs Cunliffe to appoint a lump sum of £200,000 under the terms of the deceased’s will settlement. That was rejected by Mrs. Cunliffe, but the fact that it was made demonstrates the executors’ acceptance, both at trial and before us, that the deceased had not made reasonable financial provision for his widow by making her one of a discretionary class of beneficiaries. The question, accordingly, was how much she should receive from the deceased’s estate.

The facts

[7]These are within a relatively narrow compass, although some time appears to have been taken up before the judge investigating Mrs. Cunliffe’s relationship with and conduct towards the deceased. In the event the judge, whilst finding that Mrs Cunliffe had been “at cross purposes” with the other beneficiaries of the deceased’s will, came to the conclusion that conduct on all sides was irrelevant. There is no appeal against that finding, or indeed against any of the judge’s findings of fact.

[8]Mrs. Cunliffe is now 52. She was born on 19 September 1953. She is German by origin, but has lived and worked in this country for more than 20 years. She has the advantage of being bilingual in German and English. A copy of her curriculum vitae is in our papers. This shows that she has undertaken a wide variety of different employments over the years, including caring for three different elderly people between March and October 1998.

[9]The circumstances in which Mrs. Cunliffe and the deceased met are set out in her first witness statement. In March 2001, Mrs Cunliffe saw an advertisement in the Lady magazine placed by the deceased, who was advertising for a housekeeper. She was interviewed by the deceased on 1 April 2001. Because Mrs. Cunliffe had had to travel from the South of England, the deceased put her up overnight, and asked her to start working for him immediately. She says she began work on 4 April 2001, and remained the deceased’s housekeeper until June of that year, when the deceased booked a holiday for them both and they began to cohabit as man and wife.

[10]As I have already related, Mrs. Cunliffe and the deceased were married on 29 October 2001. She was then 48, and recently divorced. The deceased was a bachelor, then aged 65. It will be immediately apparent that the marriage was of short duration, lasting only some 12 months from its celebration to the date of the deceased’s death.

[11]Mrs. Cunliffe’s circumstances were modest when she married the deceased. She owned a small property near Brecon, which she sold. The proceeds were some £22,600. Of that sum £20,000 was paid into accounts in joint names. This apart, she does not appear to have had any assets of substance, nor any independent income. She became financially dependent on the deceased, initially as housekeeper, and then as wife.

[12]By contrast, the deceased was a moderately wealthy man. He had been born on 22 January 1936. He suffered from a physical disability which it seems had been caused during his birth or perhaps childhood. He appears to have spent his working life in the family business, Worsley Hall Nurseries and Garden Centre (the Garden Centre). The family home was Chaddock Hall at Boothstown, Worsley, near Manchester. The deceased lived there with his parents until his mother died in 1988. Thereafter he lived with his father, who died on 20 May 1999.

[13]The deceased’s father, John Cunliffe, left Chaddock Hall to the deceased and after certain pecuniary legacies left the residue of his estate on discretionary trusts for a class including his sons, remoter issue and Wayne Broadbent, an employee at that time of the Garden Centre. One half of John Cunliffe’s partnership interest in the family business was appointed out to Mr. Broadbent, who became a partner in it. Thereafter, one half of John Cunliffe’s residuary estate was appointed out to the deceased, and the other half was held on trust for Bernard Cunliffe and his family.

[14]An unusual aspect of the family is that Bernard Cunliffe was deaf and dumb as are his wife, Diana, their son Victor, as well as one of Victor’s three children. This plainly has a relevance when section 3(1)(c) and (d) of the 1975 Act come to be considered.

The value of the estate

[15]As I have already stated, the figure taken by the judge for the value of the net estate of the deceased was £1,400,000. The costs of the proceedings amounted to approximately £250,000. The judge was rightly critical of this figure which, he said, would have horrified the deceased “more than anything else”. The Inheritance Tax (IHT) payable on the estate as it stood had been calculated at £352,822, although it was again common ground that any lump sum payable to Mrs. Cunliffe would attract the surviving spouse’s exemption, and thus reduce the IHT burden.

[16]The principal assets in the estate comprised investments of various kinds, Chaddock Hall, valued at some £325,000 and the deceased’s share in the family business, which was in the process of being sold to Mr. Broadbent. It is valued in the latest accounts shown to us as a debt of £337,016, being paid by instalments. No point was taken at the hearing about liquidity, and it was clear that the estate could afford to meet any reasonable order for a lump sum payment without difficulty.

Money accruing to Mrs. Cunliffe on survivorship

[17]It was also common ground that Mrs. Cunliffe had benefited by survivorship in relation to a number of funds and policies in the joint names of herself and the deceased. The judge assessed this sum at £226,000, which did not form part of the estate. He also recognised that Mrs. Cunliffe had been obliged to spend some of this money on costs and living expenses. That apart, however, she did not have any assets of substance, nor any income. It was common ground that she had an earning capacity, the extent and relevance of which I will discuss in due course

The statutory provisions

[18]I set out the provisions of the 1975 Act only in so far as they apply to the instant case, and as they stood prior to their amendment by the provisions of the Civil Partnership Act 2004. “1.- Application for financial provision from deceased’s estate(1) Where after the commencement of this Act a person dies domiciled in England and Wales and is survived by any of the following persons— (a) the wife or husband of the deceased… that person may apply to the court for an order under section 2 of this Act on the ground that the disposition of the deceased’s estate effected by his will …… is not such as to make reasonable financial provision for the applicant.

(2) In this Act “reasonable financial provision”— (a) in the case of an application made by virtue of subsection (1)(a) above by the husband or wife of the deceased means …… such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that provision is required for his or her maintenance; (b) in the case of any other application made by virtue of subsection (1) above, means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance. 2. Powers of court to make orders (1) Subject to the provisions of this Act, where an application is made for an order under this section, the court may, if it is satisfied that the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is not such as to make reasonable financial provision for the applicant, make any one or more of the following orders— (a) an order for the making to the applicant out of the net estate of the deceased of such periodical payments and for such term as may be specified in the order; (b) an order for the payment to the applicant out of that estate of a lump sum of such amount as may be so specified; (c) an order for the transfer to the applicant of such property comprised in that estate as may be so specified; (d) an order for the settlement for the benefit of the applicant of such property comprised in that estate as may be so specified; (e) an order for the acquisition out of property comprised in that estate of such property as may be so specified and for the transfer of the property so acquired to the applicant or for the settlement thereof for his benefit; (f) an order varying any ante-nuptial or post-nuptial settlement (including such a settlement made by will) made on the parties to a marriage to which the deceased was one of the parties, the variation being for the benefit of the surviving party to that marriage, or any child of that marriage, or any person who was treated by the deceased as a child of the family in relation to that marriage ….. 3. Matters to which court is to have regard in exercising powers under s 2 (1) Where an application is made for an order under section 2 of this Act, the court shall, in determining whether the disposition of the deceased’s estate effected by his will or the law relating to intestacy, or the combination of his will and that law, is such as to make reasonable financial provision for the applicant and, if the court considers that reasonable financial provision has not been made, in determining whether and in what manner it shall exercise its powers under that section, have regard to the following matters, that is to say— (a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future; (b) the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future; (c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future; (d) any obligations and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased; (e) the size and nature of the net estate of the deceased; (f) any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased; (g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant. (2) Without prejudice to the generality of paragraph (g) of subsection (1) above, where an application for an order under section 2 of this Act is made by virtue of section 1(1)(a) or 1(1)(b) of this Act, the court shall, in addition to the matters specifically mentioned in paragraphs (a) to (f) of that subsection, have regard to— (a) the age of the applicant and the duration of the marriage; (b) the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family, and, in the case of an application by the wife or husband of the deceased, the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce……. (5) In considering the matters to which the court is required to have regard under this section, the court shall take into account the facts as known to the court at the date of the hearing. (6) In considering the financial resources of any person for the purposes of this section the court shall take into account his earning capacity and in considering the financial needs of any person for the purposes of this section the court shall take into account his financial obligations and responsibilities.” (a) the wife or husband of the deceased… that person may apply to the court for an order under section 2 of this Act on the ground that the disposition of the deceased’s estate effected by his will …… is not such as to make reasonable financial provision for the applicant. (a) in the case of an application made by virtue of subsection (1)(a) above by the husband or wife of the deceased means …… such financial provision as it would be reasonable in all the circumstances of the case for a husband or wife to receive, whether or not that provision is required for his or her maintenance; (b) in the case of any other application made by virtue of subsection (1) above, means such financial provision as it would be reasonable in all the circumstances of the case for the applicant to receive for his maintenance. (a) an order for the making to the applicant out of the net estate of the deceased of such periodical payments and for such term as may be specified in the order; (b) an order for the payment to the applicant out of that estate of a lump sum of such amount as may be so specified; (c) an order for the transfer to the applicant of such property comprised in that estate as may be so specified; (d) an order for the settlement for the benefit of the applicant of such property comprised in that estate as may be so specified; (e) an order for the acquisition out of property comprised in that estate of such property as may be so specified and for the transfer of the property so acquired to the applicant or for the settlement thereof for his benefit; (f) an order varying any ante-nuptial or post-nuptial settlement (including such a settlement made by will) made on the parties to a marriage to which the deceased was one of the parties, the variation being for the benefit of the surviving party to that marriage, or any child of that marriage, or any person who was treated by the deceased as a child of the family in relation to that marriage ….. (a) the financial resources and financial needs which the applicant has or is likely to have in the foreseeable future; (b) the financial resources and financial needs which any other applicant for an order under section 2 of this Act has or is likely to have in the foreseeable future; (c) the financial resources and financial needs which any beneficiary of the estate of the deceased has or is likely to have in the foreseeable future; (d) any obligations and responsibilities which the deceased had towards any applicant for an order under the said section 2 or towards any beneficiary of the estate of the deceased; (e) the size and nature of the net estate of the deceased; (f) any physical or mental disability of any applicant for an order under the said section 2 or any beneficiary of the estate of the deceased; (g) any other matter, including the conduct of the applicant or any other person, which in the circumstances of the case the court may consider relevant. (a) the age of the applicant and the duration of the marriage; (b) the contribution made by the applicant to the welfare of the family of the deceased, including any contribution made by looking after the home or caring for the family, and, in the case of an application by the wife or husband of the deceased, the court shall also, unless at the date of death a decree of judicial separation was in force and the separation was continuing, have regard to the provision which the applicant might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce…….

The correct overall approach to a claim under section 1(1)(a) of the 1975 Act

(a) of the 1975 Act

[19]There can, I think, be little doubt that in relation to claims for financial provision and property adjustment in proceedings between divorced former spouses, the correct approach for the court to adopt, following the decision of the House of Lords in White v White

[2001] 1 AC 596

is to apply the statutory provisions to the facts of the individual case with the objective of achieving a result which is fair, and non-discriminatory. Having undertaken that exercise, a way of assessing the fairness and non-discriminatory nature of the proposed result is to check it against the yardstick of equality of division. There is, however, no presumption of equal division of assets, but as a general guide, in the words of Lord Nicholls of Birkenhead, “equality should be departed from, only if, and to the extent that, there is good reason for doing so”. He added: “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”: - see

[2001] 1 AC 596

at 605G.

[20]With appropriate adjustments based on the different statutory provisions, I see no reason, in principle, why the White v White approach to marital financial claims should not be applied to proceedings under the 1975 Act brought by a widow, not least because, in any case brought under section 1(1)(a) of the 1975 Act, section 3(2) imposes a statutory cross-check of its own to the provision which Mrs Cunliffe might reasonably have expected to receive if on the day on which the deceased died the marriage, instead of being terminated by death, had been terminated by a decree of divorce. This sub-section assumes a particular importance in the instant case due to the brevity of the marriage.

[21]Caution, however, seems to me necessary when considering the White v White cross-check in the context of a case under the 1975 Act. Divorce involves two living former spouses, to each of whom the provisions of section 25(2) of the Matrimonial Causes Act 1973 apply. In cases under the 1975 Act, a deceased spouse who leaves a widow is entitled to bequeath his estate to whomsoever he pleases: his only statutory obligation is to make reasonable financial provision for his widow. In such a case, depending on the value of the estate, the concept of equality may bear little relation to such provision.

The judgment and the attack upon it

[22]The judgment of HH Judge Howarth was extempore. It has an element of informality about it which is, at times, engaging, and the judge undoubtedly mentioned all the relevant statutory criteria. However, it has to be said that the judgment, taken as a whole, is both discursive and unfocused. Moreover, from a forensic standpoint, its principal deficiency, as Miss Bryant for Mrs Cunliffe was forced to acknowledge, is that it lacks any kind of judicial analysis. The consequence, in my judgment, is that the judge simply fails to explain how he reached his figure of £800,000. This, I think, is simply demonstrated by setting out the two paragraphs of his judgment in which he comes to announce his award. Indeed, the relevant paragraphs (65 and 66) give a flavour of the judgment overall: - “65. Subject to that, I must find an appropriate sum of capital which should be awarded to Monica (Mrs Cunliffe), and doing the best that I can and how much is always one of the most difficult questions a Judge ever has to answer or a barrister to advise upon. Counsel will know that very often within a set of barristers chambers, people will go into each other’s rooms and say “We have a claim under the Inheritance Act. These are the facts. How much?” and you will get from members of chambers differing answers over sometimes a quite broad spectrum. For better or worse the case has ended upon before me and no doubt one party will say it is better for them and another party will say it is worse for them, and perhaps they might both say it is worse for them, and if that is so, that would be a very good indication that I have got it about right. 66. The figure I have in mind is £800,000, and that is the amount of the order.”

[23]In my judgment, the proper exercise of a judicial discretion requires the judge to explain how he has exercised it. This is the well-known “balancing exercise”. The judge has not only to identify the factors he has taken into account, but to explain why he has given more weight to some rather than to others. Either a failure to undertake this exercise, or for it to be impossible to discern from the terms of the judgment that it has been undertaken, vitiates the judicial conclusion, which remains unexplained.

[24]In the law of employment, the case of Meek v. Birmingham City Council

[1987] IRLR 250

in this court contains a statement of the basic ingredients of a reasoned decision, and why reasons are necessary. The case, of course, relates to the reasons to be given by Employment Tribunals, but the principles explained in the judgment of Bingham LJ, as he then was, are universal. This is what he said:

“It has on a number of occasions been made plain that the decision of an Industrial Tribunal is not required to be an elaborate formalistic product of refined legal draftsmanship, but it must contain an outline of the story which has given rise to the complaint and a summary of the Tribunal's basic factual conclusions and a statement of the reasons which have led them to reach the conclusion which they do on those basic facts. The parties are entitled to be told why they have won or lost. There should be sufficient account of the facts and of the reasoning to enable the EAT or, on further appeal, this court to see whether any question of law arises; and it is highly desirable that the decision of an Industrial Tribunal should give guidance both to employers and trade unions as to practices which should or should not be adopted. ”

[25]Similar observations were made more recently in the judgment of this court in English v Emery Reimbold & Strick Ltd

[2002] 1 WLR 2409

, at 2417 – 2418 and in particular paragraph 19. The judgment in the instant case, in my view, fails both the test laid down in paragraph 19 of the judgment in English v Emery Reimbold and the basic Meek test. As Bingham LJ says in the latter case, the parties need to know why they have won or lost. In the instant case, neither the executors nor this court has any idea why the judge has obliged them to write a cheque for £800,000 as opposed to any other figure, including the £200,000 they had proposed.

[26]In my judgment, the judge’s failure to explain himself is, of itself, sufficient to vitiate his decision and to make it inevitable that this appeal must be allowed. Miss Reed, however, does not limit her attack to this broad ground. She makes seven additional submissions which, while they tend to pile Pelion on Ossa, deserve to be recorded, albeit in summary form. These are: -(1) that the judge failed to have sufficient regard to the very short duration of the marriage - namely a period of just over a year;

(2) that he failed to take into account properly or to give sufficient weight to the likely award Mrs Cunliffe would have obtained had the marriage to the deceased ended in divorce rather than his death, and in particular wrongly applied the principles in White v White to the case;

(3) that he failed to give sufficient weight to the fact that other beneficiaries under the discretionary trust comprised in the deceased’s will, namely his sister in law, his nephew and members of the nephew’s family, were deaf and dumb and dependent wholly on family money including the discretionary trusts comprised in the deceased’s will;

(4) that he gave too much weight to the legal duty of the deceased to maintain his wife;

(5) that he placed too much weight on Mrs. Cunliffe’s contribution to the welfare of the deceased which, on any view of the evidence, could not have been significant because of the short duration of the marriage;

(6) that in assessing Mrs. Cunliffe’s resources, the judge failed to give any or any proper weight to her earning potential (which she had accepted); and

(7) that in assessing Mrs. Cunliffe’s housing needs wrongly stated that it was not for the court to say that Mrs. Cunliffe should move out of the deceased’s house known as Chaddock Hall and failed to assess her reasonable housing needs.

[27]This is a formidable indictment, although for reasons which I will set out below, I think that the accusation in paragraph (2) that the judge “in particular wrongly applied the principles in White v White to the case” does not accurately identify the judge’s error in this respect.

[28]In seeking to meet the appellants’ notice Miss Judith Bryant, for Mrs. Cunliffe, had plainly decided in her skeleton argument that attack was the best form of defence. She submitted we should not even grant permission to appeal. She pointed out that the judge had identified all the key statutory provisions. He had plainly had regard to them, and taken them into account. £800,000 was about half the gross estate. It could not be wrong in principle to make such an award to a widow. Diana Cunliffe, Victor Cunliffe and the latter’s children were provided for by the other family trusts, and in any event the award to Mrs Cunliffe did not exhaust the estate: there was plenty left over for other family members. The judge had properly looked at Mrs. Cunliffe’s housing needs, and the duty of the deceased to provide for her. He had taken her earning potential into account. He had plainly balanced all the relevant factors and reached an award which was within the appropriate bracket.

[29]Skilfully – indeed elegantly - as this argument was presented on paper, it crumbled when presented with the relevant paragraphs of the judge’s judgment – and in particular, of course, with paragraph 65. Since, in my view, the appeal succeeds on the reasons ground, I do not propose to examine the other grounds in detail, save for the argument over White v White and the brevity of the marriage. I will, however, need to look at other parts of the judgment, in order to identify the judge’s findings, such as they are, relevant to the application of the statutory criteria under section 3 of the 1975 Act.

White v White and the short marriage point

[30]As I have already indicated, there is, self-evidently, a profound difference between a marriage which ends through the death of one of the spouses, and a marriage which ends through divorce. For present purposes, some elementary facets of that difference suffice. A marriage dissolved by divorce involves a conscious decision by one or both of the spouses to bring the marriage to an end. That process leaves two living former spouses, each of whom has resources, needs and responsibilities. In such a case the length of the marriage and the parties’ respective contributions to it assume a particular importance when the court is striving to reach a fair financial outcome. However, where the marriage, as here, is dissolved by death, a widow is entitled to say that she entered into it on the basis that it would be of indefinite duration, and in the expectation that she would devote the remainder of the parties’ joint lives to being his wife and caring for him. The fact that the marriage has been prematurely terminated by death after a short period may therefore render the length of the marriage a less critical factor than it would be in the case of a divorce.

[31]This does not, of course, mean that the length of the marriage is irrelevant or that the widow is entitled to one half of the estate, as Miss Bryant seeks to argue. The consequences of a short marriage for any award under the 1975 Act will, of course, depend on the facts of the individual case. It may well be that, as here, the brevity of the marriage is part of a powerful argument against equality of division. Whilst, therefore, there is an inevitable degree of artificiality in conducting the exercise required by section 3(2) of the 1975 Act, I am in no doubt at all that the brevity of the marriage is an important factor, and has to be brought fully into the equation when deciding what is reasonable financial provision for Mrs. Cunliffe from the deceased’s estate.

[32]An example of its relevance, and the judge’s failure to appreciate the point, seem to me to emerge from the judge’s attitude to Mrs. Cunliffe’s future housing. This is what

the judge says about it:

“58. I have been quoted a number of other authorities which it seems to me turn very much on their own individual facts, which do not necessarily help me in any meaningful way as to how I am to exercise this jurisdiction, but one comes back, it seems to me, to the question of first of all is it right within the context of this litigation that Mrs Cunliffe continues to live at Chaddock Hall. It is worth some £325,000 or was so at the date of death. No doubt it may well have gone up due to appreciation since that time, but I do not know whether it has remained in the same state of repair as it was at the date of death, and I simply do not know its present value, but let us take it at that. 59. Having myself moved from a large house to a small bungalow four years ago, I might well be sympathetic to Miss Reed’s point that Chaddock Hall is unreasonably large for Mrs Cunliffe, but it was my decision and my wife’s decision that we moved house four years ago. It is not for me to tell Mrs Cunliffe how she lives her life and where she lives. If she can afford reasonably to continue living at Chaddock Hall, a house which must have some happy memories for her, that is not necessarily anything which I ought to deprive her of. On the other hand, I do not propose to award her Chaddock Hall itself. I propose to award her a sum of money, and if she wishes to use part of it to purchase Chaddock Hall from the trustees at no doubt an independent valuation so be it. That will be her choice and the trustees’ choice.”

[33]Whilst the judge’s personal experience is interesting, it is irrelevant, and in my judgment, his approach to Mrs. Cunliffe’s housing is plainly wrong for a number of reasons. Principal amongst them, however, is that the judge does not seem to me to have assessed Mrs. Cunliffe’s housing needs within the statutory context. Of course, Mrs. Cunliffe needs somewhere suitable to live. Chaddock Hall was manifestly in excess of her reasonable housing needs. Thus it was for the judge to assess what constituted reasonable provision for her housing from the estate. This he has simply failed to do.

[34]It is at this point that the length of the marriage becomes relevant. It may well be appropriate in many cases for a widow to remain living in a former matrimonial home. But in the context of “reasonable financial provision” within section 1(2)(a) and section 3(2)(a) and (b) of the 1975 Act there is, I think, a clear difference between a widow who had been married for many years and who had made an equal contribution to the family of the deceased, and a woman in Mrs. Cunliffe’s position, who had been married only a little over a year, and who had, as a matter of simple fact, made no contribution to the family business and only a very small contribution to the family wealth. The judge does not differentiate between them. He is of the view that if Mrs. Cunliffe wants to go on living in Chaddock Hall, she should be given the money to do so. And the judge’s phrase “if she can afford reasonably to continue living at Chaddock Hall” begs the question. It is for the judge to decide what reasonable provision shall be.

[35]Thus in relation to housing, the comparison with what would be likely to happen on divorce is significant. Given the resources in this case, I am confident that such after a short marriage, a judge or district judge hearing an application for ancillary relief under MCA 1973 would have assessed Mrs. Cunliffe’s housing needs and provided her with a lump sum notionally allocated to her housing. I see no reason to adopt a different approach under the 1975 Act on the facts of this case.

[36]A subsidiary, but nonetheless relevant, factor is that the judge was aiming for a “clean break” between Mrs. Cunliffe and the other beneficiaries. Chaddock Hall is situated only some two and a half miles away from the Garden Centre. It was plainly inconsistent with the philosophy of the clean break for Mrs. Cunliffe to continue living in that particular property, nor was it necessary for her to do so, when the funds sensibly to re-house her were plainly to hand.

[37]The judge did not undertake the essential task identified in paragraph 35 above, although he was provided with all the necessary materials to do so. Such a failure is particularly unfortunate in a case like the present, as the judge will have a local knowledge of house prices. For the outsider, looking at estate agents’ particulars is a poor substitute. The judge’s attitude to White v White

[38]The judge deals with White v White and the “short marriage” point in paragraphs 56 and 57 of his judgment. This is what he says: - “56. In regard to what the claimant would be likely to receive had the marriage ended in divorce, it is clear from White v White that one starts from the position that you add up together what each of the parties to the divorce has and starts from the presumption that that is to be split so that each has a similar sum. That is a starting point, it is not a finishing point, and any circumstances of the case have to be looked at and appropriate action taken to ensure that the ultimate aware is a just one. 57. It is right that where there is a short marriage, the authorities show that a wife will get less. See, for example, the extract from Duckworth which has been put in in this regard by Miss Reed, and I fully accept that.”

[39]In my judgment, paragraph 56 shows a misunderstanding of White v White. The correct interpretation is set out in paragraph 19 above. If the judge thought he was required to presume a 50:50 split of the estate, he was plainly wrong. Furthermore, his discussion of the short marriage point in paragraph 57 is woefully inadequate. The judge simply does not appear to have applied his mind to the elements in the award to which the length of the marriage was relevant.

Other relevant findings by the judge

[40]The judge recognised that this was a claim by a widow, and thus not limited to maintenance (section 1(2) of the 1975 Act). He identified the value of the estate at £1.4 million and the costs at £250,000. He found the monies received by Mrs. Cunliffe through survivorship to be £226,000. The IHT currently payable was £352,822, although that figure would be reduced by an award to Mrs. Cunliffe at the rate of 40 pence in each pound paid to her.

[41]Having related this historical background, the judge identified a number of witnesses called by the executors, and found that they and Mrs. Cunliffe “got at cross purposes”. That was not, however, what the proceedings were about, and the judge declined, rightly, to make any findings in relation to this part of the case. The judge also declined to make any finding of conduct adverse to Mrs. Cunliffe under section 3(1)(g) of the 1975 Act. He said: - “24. A great deal of time has been spent in saying whether or no Derek and Monika were happy together or whether Monika dominated Derek, and frankly at the end of the day I doubt whether any of that evidence helps me to any marked degree to determine whether this application should succeed or no, and if it should succeed, as to what extent.”

[42]Having concluded that the will did not make reasonable financial provision for Mrs. Cunliffe, the judge turned to section 3 of the 1975 Act, and the factors to which he had to have regard. In paragraph 28 he says: - “The first is the financial resources and financial needs which the claimant has or is likely to have in the foreseeable future. Well, it seems to me that in that regards, the claimant has a number of and I think it is conceded that she has a number of matters in terms of financial needs. She will need a house in which to live. She will need income on which to live, and she will need some form of capital. It is described as a capital cushion by Miss Reed when addressing me on behalf of the defendants, and in many cases that is so. Certainly there is a need for capital out of which any extraordinary expenditure can be met, and extraordinary expenditure can be anything from having to look after one’s own health through to providing repairs to a house, providing yourself with a new care when the old one is not longer acceptable of functioning.”

[43]The judge then refers to the £226,000 Mrs. Cunliffe received by survivorship, and the £14,000 of her own, although he accepts that these funds have been depleted by legal costs. He estimates her expenditure of costs at £125,000. He then records the £200,000 offer from the executors. He begins paragraph 31 by saying:

“We will have to look at what sort of a house is appropriate for Mrs. Cunliffe and what amount should be paid, held on trust for her by way of capital. ”

[44]The latter thought prompts him to break away from considering the question of housing, and to say: - “This is clearly a case, and I say this as strongly as I can, where there has been a falling out between Mrs. Cunliffe on the one hand and other persons entitled to an interest in the estate on the other hand, and any suggestion of their being life interest is frankly inappropriate in this case. ……any awards in favour of Mrs. Cunliffe will have to be of a capital nature and not by way of a life interest during widowhood or anything of that sort.” Nobody asserts that this is the wrong approach. I have, however, already set out what the judge went on the say about Mrs. Cunliffe’s future housing at paragraph 32 above.

[45]The judge then turned to the financial resources and financial needs of the other beneficiaries within the discretionary class. He left Mrs Perry and Mr. Isherwood out of account, on the basis that neither had put in any evidence about their financial circumstances. He equally took no account of the employees of the Garden Centre. As to Mr. Broadbent, the judge knew little about him except that he had been able to purchase the deceased’s interest in the Garden Centre, and that there was a possibility of part of the garden centre being acquired for parking in relation to a neighbouring development.

[46]The relevant beneficiaries were, plainly, Diana Cunliffe, Victor, and Victor’s children. The Judge said Diana had other children about whom the judge knew nothing. Both Diana and Victor were living in houses purchased by what the judge described as “the family trusts”. Diana’s “modest, very modest” income comprised largely state benefits, but this had been supplemented from the family trusts “if and when she needs extraordinary expenditure”. The judge surmised that the trustees did not wish to pay her a regular income for fear of it affecting her state benefits.

[47]Victor was in a similar case, although his housing appeared to be inadequate for himself and his five children. The judge records that in the deceased’s lifetime Victor attempted to persuade him and the other trustees to buy a larger house for Victor and his children.

[48]Most unfortunately, the judge does not in this part of his judgment identify the “family trusts” available for the support of Diana, Victor and the latter’s children, nor the value of the assets in those trusts. This, in my judgment was a serious omission.

[49]The judge then turns to section 3(1)(d) of the 1975 Act. The judge said: - “In simple terms, Derek had obligations and responsibilities to his wife. He did not have obligations and responsibilities to his brother’s family. It is perfectly reasonably (sic) for him to want to benefit his brother’s family, especially reasonable bearing in mind the unfortunate circumstances of some of them, but it seems to me that they are not even in a moral sense obligations or responsibilities once Derek has become a married man. His primary obligation is to his wife, and that is that.”

[50]Whilst, speaking for myself, I have no quarrel with the first seven words of the final sentence of that citation, and whilst I accept that what the judge is saying in the balance of the extract amounts to a finding of fact, I do not think that what the judge says is a proper fulfilment of his obligation to weigh in the balance the matters contained in section 3(1)(d) of the 1975 Act, particularly when he has not troubled to relate how much money was available in the other “family trusts” to benefit Diana, Victor and the latter’s children, or set out what the terms of those trusts were.

[51]The judge then turns to the size and nature of the deceased’s estate. Nothing appears to turn on that. He notes in passing the disabilities of “certain of the objects of the discretionary trust”. He then recites section 3(1)(2) and (2) of the 1975 Act. In this respect, he says: - “45. In that regard I have been referred and I have no complaint about having been referred to the principles of matrimonial law which are set out by the House of Lords in the case of White v White

[2001] AC 596

, and in particular to the speech of Lord Nicholls in that case, and I will come to those again perhaps in some greater detail later in this judgment, as I have to have regard to all the circumstances of the case. ” I have already set out the judge’s further reference to White v White in paragraph 38 above.

[52]The judge then returns to the question of conduct. His conclusion, which is not challenged, is that “the evidence I have heard is that to outward appearances at least, Derek and Monika were happy together”. As to Mrs. Cunliffe’s age and the duration of the marriage, the judge says: - “49 …. I know I have to look at the age and during of the marriage. The duration of the marriage was of course just over a year. The age of Mrs. Cunliffe, she is now I think 51 years old or thereabouts. She accepts that she may be able in the future to obtain employment and to provide in part at least for her own support, but she has been unemployed since she ceased to be the housekeeper and carer of Derek in October of 2001 when they married. Thus, one has something like I think three and a half years of what could be unkindly called unemployment, and one knows that obtaining further employment for a lady of 51 with little in the way of paper qualifications but a great deal in the way of experience as is shown by her curriculum vitae , will not necessarily be that easy.”

[53]It has to be said that the judge’s findings appear to run counter to a degree to Mrs. Cunliffe’s own evidence. In her second statement in the proceedings she made it quite clear that it would be necessary for her to obtain another form of employment, and that she intended to obtain work. She anticipated, however, that her earning capacity would be limited to something in the region of £10,000 per annum gross. She does, of course, have the advantage of being bilingual in German.

[54]As to contribution to the deceased’s welfare during the period of the marriage, this seemed to the judge to be “quite obvious”. She had looked after the deceased, and had taken over the care of the house and the garden. The judge then reverted to the conduct question, only to reach the conclusion, once again, that it was irrelevant.

[55]Having referred briefly to White v. White in the manner which I have already set out, the judge deals with Mrs. Cunliffe’s housing in the manner in which I have, once again, already described. In paragraph 60 of the judgment, the judge addresses the question of additional capital. He says: - “60. In addition to that in terms of housing, she is in need of capital, capital which will form the basis for her investing it to get her an income, which together with anything she may earn by way of future salary or wages, will provide her with a proper and fair means to support herself for the rest of her days. She is now 51. Even if she obtains employment, it would be surprising if that employment were to last beyond her sixtieth birthday. One knows that some people do carry on working until well after retirement age, and one does hear that the government is considering putting the retirement age up, but it is one thing putting it up for people who are in secure employment. It is another thing actually obtaining employment when you have got past 50 years of age anyway. 61. In addition to that, the capital must not only provide it seems to me income, it must provide some form of fund which can be used to meet such expenses as are not ordinary everyday expenses, whatever it is. If the house in which she is living, whether it be Chaddock Hall or elsewhere needs repairs carrying out to it, that it can be resorted to for that purpose.”

[56]The judge then refers to “clear evidence” that the deceased had consulted another solicitor after his marriage, with a view to altering the will in order to leave “the bulk of his estate” to Mrs. Cunliffe. Nothing, however, happened, and the judge is left with the requirement for reasonable provision. I have already set out paragraph 65 and 66, and indicated that in the paragraphs leading up to them, one gets no idea of how the judge reached his figure. Paragraphs 63 and 64 read: - “63. Now doing the very best that I can, and looking at all the circumstances and looking at for example the Ducksbury (sic) tables providing some form of annuity, one still is not necessarily that much further forward. One the one hand, I have no doubt that the £200,000 that the executors have so far proposed does not go far enough. On the other hand, when giving evidence, Mrs. Cunliffe sought to portray her position as being that of someone in whose favour the vast majority of the estate should be paid to her directly. That, it seems to me, whilst being perfectly reasonable if that is what Derek had wanted to do and had done, is not the situation I am in. I have to award reasonable financial provision, and that, it seems to me, is more than is in fact what it would be proper for me to award, and in all the circumstances of this case. I think doing the best that I can, that one should first of all seek to prevent future disputes. There has been a suggestion that Monika should pay something for living in Chaddock Hall from the date of the death to the present time. I am going to provide her with an interest up to today in possession in that property so that the trustees are not bound to make any claim against her, and if they do it will not succeed. 64. Similarly, in regard to the two motor vehicles that she eventually purchased from the trustees, I am going to provide again that the trustees should not make any claim in that respect. Nor in respect of any furniture that is in Chaddock Hall or anything of that sort. I want a clean break between these parties. They are not going to get on, and it is plain that I will be doing nobody any service by prolonging legal disputes.”

The proper application of the 1975 Act to the facts of this case

[57]Counsel for both parties sensibly agreed that given the high level of costs already incurred in this case, a re-trial was not the appropriate course if we came to the view that the judge’s order could not stand. Both invited us to provide a figure in substitution for that ordered by the judge.

[58]Whilst I agree that this is the better course, it has some disadvantages from this court’s point of view. For example, the judge failed to make any finding about Mrs. Cunliffe’s housing needs, or the cost of suitable alternative accommodation. His finding as to her earning capacity is not altogether secure, given her evidence. On the other side, he did not value the family trust funds (apart from the deceased’s estate) available for the support of Diana, Victor and the latter’s children.

[59]Fortunately, I think there is sufficient material in the papers for this court to exercise its discretion and reach a figure, although the exercise, of necessity, will be somewhat rough and ready.

The assessment of the claim

[60]This is a claim by a widow, and the court is looking to provide “such financial provision as it would be reasonable in all the circumstances of the case for a … wife to receive, whether or not that provision is required for …. her maintenance” (section 1(2)(a) of the 1975 Act). The will does not make such provision. The question is one of amount. Looking at section 2 of the 1975 Act, I am in no doubt at all that this is a lump sum, once and for all clean break case, for all the reasons the judge gives. We thus reach section 3 of the 1975 Act.

[61]Mrs. Cunliffe’s resources comprise the balance of the money received by survivorship. We were told that the original figure was £240,000 (£226,000 + £14,000 – see paragraphs 17 and 43 above). This sum has been substantially depleted by living expenses and costs, but if (as is agreed should happen) her costs of the proceedings (including this appeal) are paid out of the estate, Mrs. Cunliffe will recoup the money she had expended on costs. This is something of a bow at a venture, but I am prepared to take Miss Bryant’s figure of £150,000 as being correct for Mrs. Cunliffe’s capital once her costs are refunded, although that figure is unlikely to be conservative. For current purposes, however, I take Mrs Cunliffe as having £150,000 by way of capital and a modest earning capacity.

[62]I find it very difficult to put a figure on her earning capacity, or the length of time she may be able to exercise it. In the event, I prefer to approach the matter from a slightly different direction. The object of the exercise is to provide reasonable financial provision from the estate. In so far as any such provision is calculated without taking Mrs. Cunliffe’s earning capacity into account, it can properly be said that provision from the estate can be supplemented by Mrs Cunliffe taking employment. On this point, I tend to share the judge’s conservatism. Clearly, her time-span for full time employment and pension earning is limited. In so far as she can generate income from employment, however, that will enable her to consolidate her financial provision, and help provide her with extras.

[63]Counsel sensibly agreed that if we are to approach Mrs. Cunliffe’s case on a realistic basis, we need to know what sum will be left in her hands at the end of the proceedings. To this end, counsel agreed that the costs both here and below should be borne by the estate. It is on this basis that I have been able to calculate the figure of £150,000 referred to in paragraph 61 above.

[64]In terms of “financial needs” within section 3(1)(a) of the 1975 Act, therefore, Mrs. Cunliffe has a need for housing and income for the remainder of her life. She either needs the latter to be sufficient to include contingencies; alternatively she needs free capital which is not required to generate income and can be available for such contingencies.

[65]Section 3(1)(b) of the 1975 Act does not seem to apply. Mrs. Cunliffe’s is the only application. As far as section 3(1)(c) is concerned, Miss Reed for the executors produced a summary of financial information which identified five family settlements, the details of which I need not set out, with a total value of approximately £800,000. One of these, the JHR Cunliffe Discretionary Will Trust was providing housing and school fees for Victor’s children. We were also told that Bernard Cunliffe’s estate went to his widow. The executor’s statement of account in our papers put the value of the net estate at £110, 583.

[66]I do not think I need to analyse these figures any further. They demonstrate that there is a substantial fund already available to meet the financial needs of the beneficiaries who are in need of support, which will be effectively supplemented by the balance of the deceased’s estate once Mrs. Cunliffe’s claim has been met. In my judgment, therefore, the calculation of Mrs. Cunliffe’s claim need not be affected by considerations arising under section 3(1)(c). Similar considerations apply to section 3(1)(d) so far as the other beneficiaries are concerned.

[67]As to section 3(1)(d) in so far as it relates to Mrs. Cunliffe, she was, of course, his wife and he was under a duty to make reasonable financial provision for her from his estate.

[68]The estate (section 3(1)(e)) was taken by the judge at £1.4 million subject to IHT being reclaimed as a result of any order made in Mrs. Cunliffe’s favour. No question of liquidity was raised by the executors, and the nature of the estate is not highly material, save that it includes the former matrimonial home and the deceased’s share in the family business, the latter being in the process of being sold. For the reasons I have already given, it was plainly inappropriate for Mrs. Cunliffe to remain living in Chaddock Hall.

[69]Mrs. Cunliffe has no physical or mental disability (section 3(1)(f)): various of the other beneficiaries are deaf and dumb, but for the reasons which I have given in paragraph 66 above, this does not seem to me a material consideration. Conduct (section 3(1)(g)) was found by the judge to be irrelevant, and there is no challenge to that finding. There do not seem to me to be any other matters of relevance within section 3(1)(g)

The length of the marriage, contribution and comparison with an award on divorce

[70]What is the correct approach to a short marriage case under the 1975 Act? I have already identified the broad approach based on White v White. How do those considerations translate into the instant case?

[71]The first point to make is that although this is a short marriage, Mrs. Cunliffe entered into it on the basis that her obligations to her husband were of indefinite duration, and could take all manner of forms. He was considerably older than she was. She might well have been expected to spend a number of years nursing an invalid. In short, I think it right to approach the case on the basis that in marrying the deceased, Mrs. Cunliffe, like Mrs. Miller (see Miller v Miller

[2005] EWCA Civ 984

, [2005] 2 FCR 713) was entitled to have what Singer J described in the latter case as “a reasonable expectation that her life as once again a single woman need not revert to what it was before her marriage”; (see [2005] 2 FCR 713 at 724, paragraph [41]), and that she could look forward to financial security for the rest of her life. Since the judge expressly disregarded conduct, it is in my judgment appropriate to approach her claim for reasonable financial provision on that basis.

[72]Mrs Cunliffe plainly needs accommodation. Where she chooses to live, and how much she chooses to pay for accommodation will, of course, be a matter for her within the parameters of her overall award. But I would, as I have already indicated, allocate a notional fund which it would be reasonable for her to spend on housing.

[73]Her second need is for income. Once again, the brevity of the marriage makes it inappropriate, to my mind, that Mrs. Cunliffe should expect to be maintained out of the estate at the standard of living and the level of expenditure which she enjoyed whilst Mr. Cunliffe was alive. What she requires is a sufficient lump sum to provide her with a reasonable income. In this context, Duxbury v Duxbury

[1992] Fam 62

approach provides useful guidance, not – as the judge appears to have thought – as a figure for an annuity, but as the calculation of a lump sum designed to produce a given level of income, index linked, for life.

[74]It also seems to me to be right that in looking at both housing and income the court should bring into account the money previously in joint names which Mrs. Cunliffe received by way of survivorship.

[75]In essence, therefore, in considering the brevity of this marriage and the limited nature of Mrs. Cunliffe’s contribution, the factors which they most affect seem to be the important ones of housing and level of income. There is, in my judgment, sufficient in the estate to make reasonable financial provision for Mrs. Cunliffe, but such provision should not be of a level and nature to allow her to live for the rest of her life in the former matrimonial home or at the standard of living which she enjoyed during the course of the marriage.

The Besterman cushion

[76]Re Besterman (deceased) must, I think, be viewed with a substantial element of caution, not least because Oliver LJ, giving the leading judgment, warned against using it as a basis for drawing general decisions of principle to be applied in other and probably quite different cases. Furthermore, its comparison with awards made in divorce is based on the now long repealed injunction previously concluding section 25 of the Matrimonial Causes Act which required the court : - “So to exercise those 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 irretrievably broken down and each had properly discharged his or her financial obligations and responsibilities towards the other.”

[77]Re Besterman, self-evidently, pre-dates the change of thinking in matrimonial cases brought about by White v White. In its discussion of annuities, it also predates Duxbury. The Besterman “cushion” is no longer considered a proper approach in financial proceedings following divorce. The case remains, nonetheless, I think authority for the proposition that the blameless widow of a wealthy man is entitled to look forward to financial security throughout her remaining life-time, and that “reasonable financial provision”, which is not limited to maintenance, must be viewed accordingly.

Reasonable financial provision on the facts of this case

[78]It is, I think, most unfortunate, that the parties approached this litigation from extreme positions on the spectrum. Mrs. Cunliffe appeared to be saying that she should have everything, or nearly everything: the executors appear to have been saying, albeit only shortly before trial, that she should receive, at the most, £200,000, a figure to which Miss Reed adhered as being the right figure.

[79]It was at this point that Miss Bryant produced her most effective argument, although strictly speaking it should, I think, have been by way of respondent’s notice. If the judge’s order was unexplained, she said, the answer was that the appeal should nonetheless be dismissed, because £800,000 was the award he would have reached if he had applied his mind properly to the 1975 Act and to the figures. Miss Bryant’s calculation was as follows: -(1) Income need £49,885 Less Earning Capacity £20,000 _____ £29,885 Duxbury calculation required to produce £30,000 pa = £560,000

(2) Accommodation £250,000

(3) Besterman cushion £100,000 Sub –total £910,000

(4) Deduct Mrs. Cunliffe’s own assets £150,000 Award £760,000

[80]On this analysis, Miss Bryant submitted, the figure produced by the judge was only marginally out, and well within the discretionary bracket.

[81]Miss Bryant’s figures are, of course, capable of being attacked from a number of directions. Firstly, whilst she attributes a generous earning capacity to her client, the figure of £49,885 per annum is taken from an exhibit to a statement made by Mrs. Cunliffe on 9 June 2004. The exhibit in question is divided into three columns. The first, which totals £75,570 is said to represent the joint expenditure of Mrs. Cunliffe and the deceased when living together. The second column, which totals £23,118 is said to be based on Mrs. Cunliffe’s actual expenditure at the time. The third column contains the figure of £49,885. Mrs. Cunliffe says of this figure: I have therefore calculated that on balance my future needs are somewhat less than my initial expenditure schedule but more than I have been living on as this has been very much the bare minimum. These figures appear in column 3 (£49,885).

[82]In my judgment, it would not be reasonable for the estate to be expected to make financial provision for Mrs Cunliffe at the rate of nearly £50,000 per annum net, even if that figure is substantially discounted by what is probably an over-estimate of her earning capacity.

[83]Secondly, for the reasons I have already given, I do not think that this is a case for a Besterman “cushion”. Provided the lump sum awarded to Mrs. Cunliffe is sufficient to make reasonable provision for her, how she allocates it between housing, income and capital savings will be a matter for her. The figure does, however, need to be of a sufficient size to enable contingencies to be catered for.

[84]Thirdly, it seems to me that on the properties in the estate agents’ particulars disclosed in the papers, £250,000 as a housing fund is at the top end of the bracket. Had the judge, in the exercise of a reasoned discretion, allotted that figure, it might well have been difficult to take a different view. However, as we are exercising the discretion afresh, my own figure would be lower.

[85]In all the circumstances of this case, I have come to the conclusion that the correct lump sum for Mrs. Cunliffe to receive from the deceased’s estate is a total of £600,000. This will require, accordingly a further payment of £400,000 by the executors. I reach this conclusion in the following way.

[86]Firstly, whilst estimating the costs of alternative accommodation is at best an art rather than a science, I would, as I have already indicated, discount Miss Bryant’s figure for her client’s housing to the sum of £200,000. Whilst such a figure must be, at best, an educated guess, since property prices self-evidently vary from place to place, the particulars contained in our bundle make it clear than suitable properties in the same area as Chaddock Hall can be acquired for this figure. I bear in mind that, as a single person, Mrs Cunliffe may elect, like the judge, to live in modest accommodation, and spend less money on housing than is allotted to her for that purpose. Whilst £200,000 as a housing fund may not be over-generous, I bear in mind, amongst other factors, that if Mrs Cunliffe is to return to full or even part time paid employment she needs to be living within reasonable travelling distance of any such employment.

[87]The second element of reasonable provision on the facts of this case is, of course, capital to provide income and to meet the other exigencies of life. When her costs are paid, Mrs. Cunliffe will have, on a conservative estimate, £150,000 free capital of her own, which must plainly come into the equation. She is now 52. Section 3(5) of the 1975 Act requires me to “take into account the facts as known to the court at the hearing”. That, I take to be the hearing before this court.

[88]In my judgment, this is a case in which the Duxbury approach is appropriate. There are, plainly, several ways of approaching the problem. In my judgment, Miss Bryant’s approach produces too high a figure. It inflates Mrs. Cunliffe’s income needs, and by giving her a Duxbury lump sum of £560,000 to produce a notional income of £30,000 per annum net, index-linked for life without bringing her own assets into account, it runs the risk of duplicating the already inappropriate “cushion”.

[89]In my view, a preferable approach is either to treat the Duxbury calculation as providing the estate’s contribution to Mrs. Cunliffe’s essential (core) support, with her earning capacity and the £150,000 capital as her contingency fund; alternatively, the £150,000 can be added in to the Duxbury fund, with Mrs. Cunliffe’s earning capacity as the fund for contingencies.

[90]As I indicated in paragraphs 76 and 77, the concept of the Besterman cushion must in any event be viewed with caution. A Duxbury fund is not the same as an annuity. The Duxbury model was designed to meet criticisms made in this court in Preston v Preston [1982] Fam. 17 that lump sums orders designed to produce income took no cognisance of the fact that the payee retained the capital. The Duxbury lump sum was designed to meet this criticism and thus to produce the same level of income, index-linked, for the remainder of the recipient’s actuarial life-span, with the capital being spent in the process so that, on death, there was nothing left. A sophisticated Duxbury calculation could factor in a given number of years of gainful employment for Mrs. Cunliffe at a given notional rate, together with any state pension benefits to which she may be entitled.

[91]We lack the material to undertake such a sophisticated calculation, and in any event it has to be accepted that the Duxbury exercise is highly artificial. As has been said more than once, the only thing one can be sure about Duxbury is that the figure is likely to be either too high or too low. It remains, nonetheless, a useful guide.

[92]Using the latest tables, contained in the 2005 – 2006 edition of the publication At a Glance a lump sum of £560,000 will produce an income of £30,000 per annum net for life. £30,000 per annum net seems to me a not unreasonable income for a person in Mrs. Cunliffe’s position, who has no dependants and no mortgage. If, from that figure one deducts Mrs. Cunliffe’s conservatively calculated £150,000, the lump sum is reduced to £410,000, which I would round down to £400,000. Added to that is her housing fund of £200,000, making a total lump sum of £600,000.

[93]An alternative way of looking at the problem is to posit that a lump sum of £400,000 would, on the Duxbury tables produce an income of between £20,000 and £25,000 per annum net, with £150,000 left to Mrs Cunliffe as “free” capital for contingencies. In either case, Mrs. Cunliffe has her earning capacity on top.

[94]Speaking for myself, therefore, I regard a lump sum of £400,000 producing a notional income of between £20,000 and £25,000 per annum net, indexed linked for life, plus a housing fund of £200,000 as reasonable financial provision from the deceased’s estate on the facts of this case, taking into account, as I do, that Mrs. Cunliffe will have, in addition, free capital of £150,000 the bulk of which derives from the deceased by way of survivorship, as well as any additional income from employment.

[95]Finally, as required by White v White, I apply the “equality of division” cross-check. For the reasons which I have already given, I regard this as being a less valuable tool in a case under the 1975 Act than it is under the Matrimonial Causes Act 1973. Apart from the matters I have already mentioned, a lump sum of £600,000 will result in a total saving of £240,000 in IHT: the estimated figure of £352,822 is thus reduced to £112, 822.

[96]As a percentage of the gross estate (taking the judge’s figure of £1.4 million) a lump sum of £600,000 is a little under 43%. Taking the same figure for the gross estate, and taking into account the reduction of IHT to £112,822, the net estate becomes £1,287,178, of which £600,000 is 46.61%. If costs of between £250,000 and £300,000 are deducted from the estate before the calculation of Mrs. Cunliffe’s lump sum, her award easily exceeds 50% of the estate. If £250,000 is taken as the figure for costs, the award of £600,000 amounts to nearly 58% of the estate: if the figure of £300,000 is taken, the award amounts to a little over 60%.

[97]The figures set out in paragraph 96 above reinforce my view that £600,000 is at the top end of the proper bracket for an award on the facts of this case. I have, of course, also considered whether the reasonable financial provision for Mrs. Cunliffe should be reduced in the light of the very substantial costs incurred by both sides in fighting this litigation. I have, however, come to the view that it would be wrong to penalise Mrs. Cunliffe for the fact that the executors did not make an offer until a very late stage, and when they did, they made an offer which was manifestly inadequate and which Mrs Cunliffe was clearly entitled to reject. Furthermore, although this is not a matter which we have investigated in depth, it is plain that the question of Mrs. Cunliffe’s conduct was raised before the judge, and a considerable amount of court time spent on an issue which the judge, rightly, ruled irrelevant. Whilst I am not suggesting that the executors have behaved in any way improperly, the fact that the estate has to bear so substantial a burden of legal costs is not a matter which I think should interfere with what is otherwise a proper award.

[98]There are, in my judgment, ample reasons for departing from equality in this case, not least the brevity of the marriage and the absence of any substantial financial contribution on Mrs. Cunliffe’s part. An award of £600,000 in my judgment fulfils the terms of the statute, and does not discriminate against Mrs. Cunliffe. It leaves ample funds for the exercise of the trustees’ discretion in relation to the other beneficiaries. It also has the side effect of reducing the overall IHT payable by the estate by £240,000. In my judgment, it is a fair result.

[99]I am conscious that my calculations lay me open to the charge that in assessing reasonable financial provision for Mrs. Cunliffe, I have concentrated on “needs”. In practical terms, however, Mrs. Cunliffe’s needs, seen in the context of the case, seem to me the major factor within the statutory framework. In the event, however, there is no one “correct” figure: the exercise of a judicial discretion would normally result in a “bracket” for the award. My award leaves Mrs. Cunliffe with assets totalling £750,000, and for the reasons I have given, the award of £600,000 is, in my judgment, at the top end of the bracket. A lower figure could easily be warranted without either being plainly wrong.

[100]I would, accordingly, allow the appeal. I would set aside the judge’s award in paragraph (1) of his order of £800,000 and substitute £600,000. Since £200,000 has already been paid, I would propose that the balance be paid within 3 months, and that payment of the balance should coincide with Mrs. Cunliffe vacating Chaddock Hall. I would not interfere with the order for costs made below, and would propose that the costs of both sides in the appeal be paid from the estate on a similar basis.

[101]In order to save further costs, I would also propose that counsel be invited to draft the order of the court, and that neither party need attend when this judgment is handed down. In the event of any dispute over time to pay or Mrs. Cunliffe vacating Chaddock Hall, submissions should be addressed to us in writing.

[102]I would allow the appeal accordingly.

Lord Justice Mummery :

[103]I agree with Wall LJ that the appeal should be allowed and that the amount of the financial provision for Mrs Cunliffe should be reduced from £800,000 to £600,000.

[104]The disposition of the deceased’s estate effected by his will clearly failed to make reasonable provision for Mrs Cunliffe. The judge was accordingly entitled to make an order for the payment out of the estate of a lump sum in order to make such financial provision for her as would, in all the circumstances of the case, be reasonable for her to receive. In exercising his discretion as to the amount of the provision the judge was directed by section 3 of the 1975 Act to have regard to the specific factors listed in the section and to any other matters which the court might consider relevant.

[105]When considering whether to overturn HHJ Howarth’s decision in favour of Mrs Cunliffe, this court must be mindful of the limited circumstances in which it is entitled to interfere with the exercise of his judicial discretion as to what would be reasonable financial provision.

[106]The deceased’s personal representatives, who made an open offer to appoint £200,000 out of the discretionary will trust, think that the award of £800,000 was excessive and so they appeal against it. The Court of Appeal is not, however, entitled to set aside the order simply on the ground that, if it had heard the case at first instance, it would have taken a less generous view of Mrs Cunliffe’s claim. When dealing with a substantial estate of this kind it is perfectly possible for different judges hearing the same evidence and the same legal arguments to make unappealable decisions varying widely in their assessment of what would constitute reasonable provision for the deceased’s widow. The judicial discretion in the 1975 Act to do what is reasonable in the way of financial provision allows for a range of awards. There is no single “right” figure.

[107]In order to succeed the appellants must satisfy the Court of Appeal that the judge failed to take proper account of the guiding factors laid down in section 3 of the 1975 Act, or that he has failed to exercise his discretion as to the amount of the lump sum judicially: for example, as a result of applying a wrong principle of law, or through a misunderstanding of the facts of the case, or in arriving at an amount which is, for some other reason, plainly wrong. As Nourse LJ said in Re Krubert

[1997] Ch 97

at 102f “So the question on the appeal is whether the [recorder’s] decision as to the provision she should receive was wrong in principle or, viewed as an exercise of discretion, plainly wrong.”

[108]In this case I agree with Wall LJ that the award of a lump sum of £800,000 to Mrs Cunliffe is not justified by the sparse reasoning of the judge, by the facts found by him or by the application of the relevant law to them. The judge’s exercise of discretion relating to the amount of the lump sum was flawed, in particular, by his misunderstanding that the effect of White v. White was to give rise to a presumedentitlement to equal division of assets between spouses in the context of the 1975 Act; by his failure to take proper account of the short duration of the marriage and its impact on the assessment of the lump sum; and by his failure to grapple with the important question of Mrs Cunliffe’s actual housing situation in Chaddock Hall (valued at £325,000 at the date of death) and of an assessment of her reasonable housing needs. His award of over 60% of the net estate of £1.4m to a wife to whom the deceased had been married for only just over a year was not the product of a correctly informed judicial balancing exercise. It erred in principle by arriving at that amount without taking proper account of the relevant statutory guidelines. It so far exceeded the reasonable ambit of his discretion on quantum as to be plainly wrong.

[109]I agree that the reasonable course for the deceased to have taken in disposing of his estate would have been to give Mrs Cunliffe an absolute interest in a substantial lump sum. How much? £800,000 was far too much. The substitution of the sum of £600,000 proposed by Wall LJ is not and cannot be the product of a precise calculation. It is, however, for the reasons explained by him, an approximation which involves a departure from starting point of equality of division amply justified by a number of factors: the size of the net estate, Mrs Cunliffe’s reasonable housing and financial needs, her financial resources, in particular her entitlement to £226,000 by survivorship, and the agreement that she will recoup her substantial costs of the proceedings from the estate.

[110]The substituted sum also takes proper account the statutory guidelines to which the court is directed to have regard, in particular Mrs Cunliffe’s age and the very short duration of her marriage to the deceased. The shortness of the marriage limited the opportunities available to Mrs Cunliffe to make a significant contribution to the welfare of the deceased. The size of the amount awarded by the judge indicates that he could not have had any real regard to the short duration of the marriage, there being only a passing mention of the factor in paragraph 49 of his judgment. He noted the factor without attempting to explain what effect it had on his assessment of the lump sum in this case, as compared, for example, with a marriage lasting for 10 or 20 years.

[111]For the above reasons this is one of those unusual cases in which this court is entitled to interfere with the judge’s discretion relating to reasonable financial provision under the 1975 Act.

Lord Justice Moore-Bick:

[112]I agree that the appeal should be allowed for the reasons given by Wall LJ an Mummery LJ and that the amount of the financial provision for Mrs Cunliffe should be reduced from £800,000 to £600,000.

Cited in 11 later judgments

and 2 more of the most senior