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When a committed marriage runs its course, and the two parties responsible have amassed an estate of significant worth, should the ‘Duxbury paradox’ find just approval, or will the virtue of equality prevail?
After spending over three decades together as husband and wife, business partners and parents, the cross-appellants discussed not only invested exorbitant amounts of money into what was termed a ‘clean break’ divorce, but wound up fighting over percentages, whilst losing sight of the objective first presented to the courts.
Having contributed roughly equal amounts of time and capital into a successful farming business, it was felt by the wife that she needed to end the marriage, and strike out alone in a similar field. While on paper the division of assets appeared straightforward, there were anomalies in the form of individual benefit to inheritance by the husband through valuable farming estate and his decision to continue operating the business shared by the two parties, as opposed to liquidation in the wake of annulment.
During the original hearing, the judgment passed disproportionately in favour of the husband, leaving the wife with less than one-fifth of the estate value. This was calculated through the application of the Duxbury fund principle, as first described in Duxbury v Duxbury. This antiquated approach to approximation of required financial assets is based upon the idea that in order to establish the requisite level of income for the wife in a divorce, the phrase ‘the longer the marriage and hence older the wife, the less the capital sum required for a Duxbury Fund’ will suffice.
Following an unsurprisingly swift challenge, the Court of Appeal sensibly reconsidered the previous judgment, and increased her award to two-fifths of the estate, upon grounds of equality and the principle that the increase in award had now provided sufficient funds (£1.5m) for the wife to not only start her new venture, but have enough to live on without the burden of stress or discomfort. Similarly, the remaining estate was healthy enough for the husband to continue working, albeit with short-term financial help from his extended family.
While taken on it’s weighting, the outcome would appear at risk of bias, however the ethos that divorcing parties should take steps to help each other start afresh, is clearly present where the dissolution of the joint enterprise would have placed the husband at risk of suffering, while the wife enjoyed the benefit of excessive capital for the purposes of need, despite making the choice to depart from a thriving and well-established business.
“In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife in their respective roles.”
“[I]t should be possible to use equality as form of check for the valuable purposes already described without this being treated as a legal presumption of equal division.”
“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.”
“[E]quality should be departed from only if, and to the extent that, there is good reasons or doing so.”
“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.”
“[T]he 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.”