P v P (Inherited Property)

These are ancillary relief proceedings arising on the breakdown of the marriage of Mr and Mrs P. The husband was born in 1952 and the wife in 1958. They married in 1985 and separated in August 2001. They have two children, a boy A born in 1986 and a girl B born in 1988. The wife petitioned for divorce on 6 February 2003 and a decree nisi followed on 3 June 2003.

The husband and the wife are both farmers. They spent their entire married life farming a hill farm in the north of England. The farm has been in the husband’s family for some time: he is the fourth generation to have farmed it. He was working the farm when he first met the wife. She at that time was training to be a farmer. They met at the local market. It is quite clear that the farm has always been more than a mere source of the husband’s livelihood. It is his way of life, indeed it is his whole life. He was born there. He has worked on it since 1968. Now that his marriage has broken down he sees it as all that he has left. It was clear from his evidence that, whatever he may have said on occasions in the past, he cannot really contemplate retiring. He wants to die there – preferably in harness. He told me, and I accept, that he is not the kind of man who can contemplate living in a town or even in a village. His life is – always has been – bound up in the farm. His daily horizons extend little if at all further than visits to the local market and occasionally to the next town. It is this factor that has made this case so excruciatingly difficult, for the relief which the wife says she is entitled to would almost certainly necessitate a sale of the farm, something she says, and I accept, she would rather avoid.

Happily there is very little dispute between the parties on most matters. There is an agreed Schedule which shows that the family assets have an aggregate value (net of notional realisation costs and Capital Gains Tax) of £2,501,356 (I take the figures in the Schedule and ignore a number of minor adjustments). They are held as to£2,105,610 by the husband, £70,678 by the wife and the remaining £325,068 by the two of them jointly.

The four most important assets all relate to the farm. (1) The land, which is vested in the husband, has a net value of £1,746,900. This includes the farmhouse, a substantial six-bedroomed building which, together with the other non-farm buildings within its curtilage, is valued at £550,000 gross, a three-bedroomed bungalow, valued at£275,000 gross, occupied by the stockman, and a derelict dwelling, H, valued at£45,000 gross. (2) The husband also has an interest in a mineral lease which has a net value of £67,700. (3) The farm business is carried on by the husband and wife in partnership. The partnership assets are worth £325,068, including some £78,000 cash at the bank representing the proceeds of sale of livestock. (4) Both the husband and the wife have shares in a local farmers’ co-operative, MartCo: the husband’s shares are worth £250,840 net, the wife’s are worth £3,675.

The other assets consist of a number of bank accounts, pension funds, and other investments. As at the date when the Schedule was prepared the husband had bank accounts totalling £16,783, pension funds worth £23,364 and premium bonds worth£23; the wife had bank accounts totalling £22,340 (£11,686 of which was earmarked for paying the children’s school fees), pension funds worth £12,584, premium bonds worth £30 and a NFU bond worth £32,049.

The parties’ only significant liabilities (the school fees I understand are paid up to date) are their costs of the proceedings. The wife’s costs (inclusive of VAT) amount to £38,035, of which she has already paid £15,367; the husband’s costs amount to£31,607 of which he has already paid £20,516. Thus she has to find another £22,668; he has to find only a further £11,091.

The family’s income has always been modest. In recent years it has of course been drastically affected by the successive disasters of BSE and foot and mouth. The farm profits (year ending 30 November) were £10,407 in 2000, £1,645 in 2001, £15,844 in 2002, and £40,731 in 2003. The husband’s income from the MartCo shares and from his directorship in the company was £6,258. The husband’s share of the annual rent and royalties under the mineral lease is £25,000, though that sum is in effect charged under his father’s will with an annual payment to his mother of £7,500. Developments on nearby land which it is agreed are likely to happen mean that from 2006 until 2013 no royalties will be payable so that he will receive only his share – £6,000 – of the guaranteed rent. That sum, of course, is less than the amount payable to his mother, so that after 2005 his income from the mineral lease will in effect stop. I understand that it is unlikely to resume until 2013 or to return to its present level until 2016. The farm is currently participating in a study as to its suitability as a wind farm, which brings in an additional £2,000 per annum. It is possible, though unlikely given its location, that a wind farm might be established, which would bring in extra income.

Whilst living on the farm the wife was able to supplement the domestic economy with her earnings as a farming journalist, but that source of income has dried up since she moved. At present she is unemployed, receiving, in addition to her share of the farming profits, child benefit for the children of £1,211 per annum and child tax credit of £2,172.

After the separation the wife moved to the south of England with the children. They live in a rented property in a village. Both children have had difficulties, A as the result of a serious injury to his eye in September 2000, B as the result of the Chronic Fatigue Syndrome from which she has suffered since September 2001. The consequence is that each of them is now one year behind in their schooling. A is doing his GCSEs this summer; B will be doing hers next year. A therefore has a little over two years more at school, B a little over three years. Both are at private schools. A is a day boy, B a weekly boarder. The school fees amount in all to some £38,000 per annum: that sum will be required for the years 2004/2005 and 2005/2006 and£19,000 for the year 2006/2007 – a grand total of some £95,000. It is anticipated that both children will move on to higher education after they leave school.

Because of the children’s special needs, and the fact that they require more attention than many children of their ages, the mother has not been working. As she put it in her oral evidence, “[A] takes a lot of propping up … my job became [B]’s recovery.” Previously she was earning £11,200 per annum as an assistant house mistress and assistant librarian at a local school, but she left that employment in February 2003. In a letter dated 19 June 2003 her GP gave it as his opinion that “it is absolutely essential that Mrs [P] is at home and able to support both children.” In a letter dated 7 July 2003 the Consultant Ophthalmologist treating A made much the same point: “I would expect that Mrs [P] will need time to continue to provide the emotional and psychological support for both [A] and his sister [B].” So too did the Community Psychiatric Nurse who had been helping. In a letter dated 8 September 2003 she recorded that, although the children’s cases had been closed at the end of August 2003, “they are still vulnerable to relapse,” adding

“[Mrs P] needs to be at home to be available to the children as they now embark on a new academic year. [A], in particular, has complex physical health needs that necessitate frequent clinic appointments. [B] needs considerable emotional support from her mother to help her feel secure enough to maintain going to school full time.”

Now that the children are settled in their schools, however, mother has begun to look for a job, but thus far without success.

The husband accepts, as Mr Chamberlayne put it in his skeleton argument, that the wife made a full contribution to family life. She ran the house and looked after the children. But her contribution went further than that. There was some disagreement as to just what she did on the farm. In my judgment she played a significant part. No doubt the hard core of the work, day in and day out, was done by the husband and the stockman. But this was not a farmer’s wife who simply stayed in the kitchen. She did hard physical work in the farmyard and in the fields: she wielded a pitchfork moving silage and straw, she did much of the lambing, she went to market and to the agricultural suppliers, she kept the books and made the PAYE returns, and filled out the annual IACS forms. She was the only licensed sheep dip operator on the farm. On top of that, as I have said, she supplemented the family’s income by her work as a farming journalist.

Moreover, it is common ground that the wife also lent the partnership £40,000 which was used to fund the renovation of the bungalow now occupied by the stockman. She was paid annual interest of £5,000 but it is unclear – and a matter of dispute between the parties – whether any and if so how much of the capital has been repaid. The bungalow is shown as an asset of the farming partnership valued (seemingly at cost) at £40,698.

That said, the wife’s contribution, full as it was and demanding of her time and strength, was to the family income and family life. It was not to the acquisition of the capital assets. Although by her endeavours the wife undoubtedly contributed to the maintenance of the value of the capital assets (cf Lord Simon of Glaisdale in Haldane v Haldane [1977] AC 673 at p 697 cited by Lord Cooke of Thorndon in White v White [2001] 1 AC 596 at p 615) it was the husband who brought into the marriage what he had inherited from his ancestors: the farm land, the shares in MartCo and his share in the mineral lease.

Since the parties separated the wife has not merely looked after the children; she has had to work very hard coping with their more than usually demanding needs. That burden, which will continue at least until they leave home to go to university, has had a significant impact on her ability to work. It is, as Mr Trowell says, a significant contribution both past and continuing into the foreseeable future.

In her Form E dated 2 May 2003 the wife identified her principal capital need as being a house for herself and the children costing £400,000. She sought a clean break with child maintenance and a school fees order.

Mr Chamberlayne makes some play of the fact that the wife’s claim has expanded since it was first formulated.

Before me the wife’s claim was formulated on two different bases:

The husband’s final proposal was that the wife should receive a lump sum of £340,000 (that is, £400,000 for housing, less £60,000, the value of the wife’s liquid assets), in addition to which he would pay £4,000 per annum for each child and all the school fees.

By the end of the hearing it was at least tacitly agreed that the husband would pay both the children’s maintenance in the agreed sum of £4,000 each per annum and their school fees. It was also agreed that the wife should keep her motor car. She would of course retire from the farm partnership (subject to the husband indemnifying her against any demands for income tax). The dispute therefore revolves around the wife’s claims for capital and income.

The wife has produced various sale particulars indicating that four-bedroomed properties in her village or the surrounding area cost £360,000 and upwards.

The wife calculates her income needs at a little under £27,750 and sets out the details in a budget that Mr Chamberlayne has not sought to challenge in detail, though I note that it includes a sum of £7,800 for food for the wife and the children and a sum of £3,500 for a foreign holiday, again for the wife and the children.

There is a dispute about the wife’s earning capacity. She says that she might be able to earn £6,000 which, together with child tax credit and working tax credit, would bring her income to about £10,000. The husband, basing himself on her previous employment, and accepting that she cannot be expected to accept any old job, suggests that she is able to earn £10,000 which, together with child tax credit and working tax credit, would bring her income to about £15,000. On either basis she would in addition be receiving child benefit and maintenance from the husband for the children.

The husband’s ability to raise money either by mortgaging the farm and/or by selling off some of his assets, including if need be some parts of the farm, remains a matter of some obscurity – in significant measure because he seems to have been unable to bring himself to address the practical implications of having to meet his wife’s claims. Thus he seems not to have even considered a sale and lease-back of the farm or the extent to which his relatives might be able to assist: one of his sisters farms an adjoining farm. On 8 December 2003 the AMC offered to lend him £325,000 on the security of the farm, conditional on receiving evidence to confirm the amount of shares held by him in MartCo and evidence of £80,000 savings. The annual repayments were £15,762.52. That offer lapsed on 27 February 2004. An accountants report dated 7 May 2004 obtained by the wife’s solicitors points out that this offer was made before the accounts as at 30 November 2003 came to hand, showing net profits of £40,731 rather than £15,844 for the previous year, and that AMC might therefore be prepared to offer more than £325,000. The accountant also suggested that the farmhouse could be mortgaged for 70% of its value – £385,000 – at an interest- only rate of 5% costing the husband £19,250 per annum. In cross-examination the husband accepted under pressure that he might be able to raise as much as £500,000 on mortgage and by selling the shares – though that would leave him unable to pay the school fees – but disputed that he could possibly raise £550,000 in that way.

The wife suggested that the husband might alternatively, or in addition, raise capital, whilst avoiding the sale of the farm, by various other means. He could sell the farmhouse, relocating himself either to H or into rented property. She produced particulars showing a three-bedroomed cottage to rent in a hamlet south-west of the farm, unfurnished at £450 per calendar month. He could realise his interest in the mineral lease. He could sell his MartCo shares. He might even be able to sell off the bungalow occupied by the stockman.

The husband raised difficulties in relation to each of these suggestions. Thus, H is derelict and has no road access. The hamlet is too far away from the farm. The shares are conventionally sold only rarely and then in small quantities (in the last three years only 102 shares in all have been traded), any attempted sale of his entire shareholding would either prove impossible for lack of willing purchasers or so seriously depress the market as to realise only a comparatively modest amount, and in any event he needs the shares in order to be able to meet the children’s school fees. The bungalow cannot be sold, because the stockman is entitled to occupy it as one of the terms of his employment and in any event no-one will do the job unless accommodation is provided.

I accept that it will be very difficult for the husband. But the brute fact is that if he is to achieve his ambition of keeping the farm, whilst still meeting his wife’s proper claims, he is going to have adopt a more realistic – what I accept is going to be for him a more painful – approach to the imperative need to release capital than he has thus far been willing to contemplate.

My approach to the exercise of the statutory powers conferred on me by the Matrimonial Causes Act 1973 is determined by section 25, to be read now in the light of White v White [2001] 1 AC 596. 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 being 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 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.”

It is common ground that no question of ‘conduct’ arises here within the meaning of sub-section (g).

Relying for this purpose on Trippas v Trippas [1973] Fam 134, Mr Trowell sought to persuade me that the wife’s inability to share in the value of the farmland if it ever came to be sold in future constituted a “benefit … which [she] will lose the chance of acquiring” within the meaning of sub-section (h). I do not agree. The point, however, has little significance because the farmland is plainly an asset which has to be taken into account under sub-paragraph (a), and the financial implications for the wife if it is left in the husband’s hands plainly fall to be taken into account under sub-paragraph (b).

I need not explore White v White in any great detail, save to emphasise, as Lord Nicholls of Birkenhead pointed out at pp 604-605, that the objective must be to achieve a fair outcome, not discriminating between husband and wife and their respective roles. As Lord Nicholls said at p 605:

“In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles. 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 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 para (f), relating to the parties’ contributions … 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.”

In this context I do not overlook Thorpe LJ’s comment in Lambert v Lambert [2002] EWCA Civ 1685, [2003] 1 FLR 139, at para [38]:

“A distinction must be drawn between an assessment of equality of contribution and an order for equality of division. A finding of equality of contribution may be followed by an order for unequal division because of the influence of one or more of the other statutory criteria as well as the over-arching search for fairness.”

Nor do I overlook Thorpe LJ’s comment in Parra v Parra [2002] EWCA Civ 1886, [2003] 1 FLR 942, at para [27], strongly pressed on me by Mr Chamberlayne, that:

“As a matter of principle I am of the opinion that judges should give considerable weight to the property arrangements made during marriage”.

As Mr Chamberlayne pointed out, although the farm business was put into the parties’ joint names, the land and the other tangible assets were retained in the husband’s sole name.

There is, however, one aspect of White v White which featured prominently in the arguments before me and which accordingly requires rather greater consideration. It relates to the well-known passage in the speech of Lord Nicholls at p 610 where he considered inherited money and property:

“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 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 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 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.”

There is an important discussion of this passage in the judgment of Nicolson CJ and Buckley J in the Family Court of Australia in Figgins v Figgins [2002] FamCA 688 at paras [63]-[65]:

“[63] His Lordship refers to a view that inherited property, whenever acquired, should stand on a different footing from other matrimonial property. According to this view, the spouse to whom it was given should be allowed to keep it. Conversely, as a consequence of such a view, the other spouse has a weaker claim to it.

[64] Lord Nicholls of Birkenhead entirely rejects the above proposition. The substance of what his Lordship said after referring to that view, is as follows:

–

when present, the factor of an inheritance is one of the circumstances of the case;

–

it represents a contribution by one of the parties;

–

the judge should take it into account and decide how important it is in the particular case;

–

the nature and value of the property and the time that it was acquired are among the relevant matters to be considered;

–

however, in the ordinary course, this factor carries little weight, if any, in a case where the claimant’s financial needs cannot be met without recourse to the property.

[65] We note in passing that Thorpe LJ in the later case of Cowan v Cowan … appears to have treated Lord Nicholls of Birkenhead’s statement as supportive of a view that we think that Lord Nicholls of Birkenhead rejected, that it is appropriate to “quarantine” an inheritance.”

That analysis was adopted and applied by Bennett J in Norris v Norris [2002] EWHC 2996 (Fam), [2003] 1 FLR 1142, at paras [64], [66]-[67]:

“[64] … Applying the words of the statute, in my judgment, the court is required to take into account all property of each party. That must include property acquired during the marriage by gift or succession or as a beneficiary under a trust. Thus, what comes in by statute through the front door ought not, in my judgment, to be put out of the back door, and thus not remain within the court’s discretionary exercise, without very good reason. In my judgment, merely because inherited property has not been touched or does not become part of the matrimonial pot is not necessarily, without more, a reason for excluding it from the court’s discretionary exercise. But the crucial question is, does that part of the speech of Lord Nicholls of Birkenhead in White v White lead to the conclusion that inherited property ought to be excluded when the court, having determined the assets of each party, comes to make its assessment of what relief it should order? …

[66] Mr Mostyn submitted that the sentence in Lord Nicholls of Birkenhead’s speech taken by Mr Scott into … his skeleton argument is not the ratio of Lord Nicholls of Birkenhead’s speech. It was part and parcel of his account of a certain view or opinion ‘widely but not universally held’. The ratio, it is submitted, is the third paragraph, ie:

‘It [inherited property] represents the contribution made to the welfare of the family by one of the parties in the marriage and the judge should take it into account.’

Further, Mr Mostyn relied upon the dicta of Nicholson CJ and Buckley JJ in Figgins v Figgins [2002] FamCA 688.

[67] In my judgment, the arguments of Mr Mostyn on this point are to be preferred to those of Mr Scott. If I am wrong and Lord Nicholls of Birkenhead did enunciate a guideline that in general inherited property ought to be excluded, then, in my judgment, he was not saying that it was an immutable or fixed principle. Whether the guideline should be applied in any particular case must depend upon the facts and upon the court’s assessment of fairness in each case. In this case, if the inherited assets of the wife are to be taken into account as part of her contribution to the marriage and the family, which, in my judgment, they must, then there is no reason to exclude them from the wife’s assets when performing the discretionary exercise. For to do so would mean the wife could have her cake and eat it. She gets credit for her contribution from the inherited assets and further credit if the value of the inherited assets are deducted from the total of her assets before division. That would be tantamount to double counting and thus unfair.”

Perhaps not altogether surprisingly the same analysis commended itself to Mr Mostyn (sitting as a Deputy High Court Judge) in GW v RW (Financial Provision: Departure from Equality) [2003] 2 FLR 108 at paras [48]-[49].

I respectfully agree with Bennett J and Mr Mostyn. But I should like to emphasise the importance of Lord Nicholls’ observation that

“The judge should … decide how important it is in the particular case. The nature and value of the property, and the time when and circumstances in which the property was acquired, are among the relevant matters to be considered.”

There is inherited property and inherited property. Sometimes, as in White v White itself, the fact that certain property was inherited will count for little: see the observations of Lord Nicholls at p 611 and of Lord Cooke of Thorndon at p 615. On other occasions the fact may be of the greatest significance. Fairness may require quite a different approach if the inheritance is a pecuniary legacy that accrues during the marriage than if the inheritance is a landed estate that has been within one spouse’s family for generations and has been brought into the marriage with an expectation that it will be retained in specie for future generations.

That said, the reluctance to realise landed property must be kept within limits. After all, there is, sentiment apart, little economic difference between a spouse’s inherited wealth tied up in the long-established family company and a spouse’s inherited wealth tied up in the long-held family estates. And as Coleridge J pointed out in N v N (Financial Provision: Sale of Company) [2001] 2 FLR 69 at p 80:

“There is no doubt that had this case been heard before the White decision last year, the court would have strained to prevent a disruption of the husband’s business and professional activities except to the minimum extent necessary to meet the wife’s needs.

However, I think it must now be taken that those old taboos against selling the goose that lays the golden egg have largely been laid to rest; some would say not before time. Nowadays the goose may well have to go to market for sale, but if it is necessary to sell her it is essential that her condition be such that her egg laying abilities are damaged as little as possible in the process. Otherwise there is a danger that the full value of the goose will not be achieved and the underlying basis of any order will turn out to be flawed.”

On the other hand, as Mr Trowell points out, the profits from the farm are so low in comparison with the value of the underlying assets that there can be no talk in this case of the goose that lays the golden eggs.

Ancillary relief farming cases, as Wilson J observed in R v R (Lump Sum Repayments) [2003] EWHC 3197 (Fam), [2004] 1 FLR 928, at para [3], are notoriously difficult to resolve. That was a farming case where (see at para [23]) the vast bulk of the capital was represented by shares which had come to the husband by gift and inheritance but were tied up in a family company in which he had only an albeit substantial minority holding. The case is of assistance for two reasons. First, because it illustrates the creative ingenuity which may on occasions be necessary if a fair and just result is to be achieved. Secondly, because of an illuminating comment made by Wilson J at para [38]:

“The husband is the owner in possession and in remainder of shares which the district judge valued on a pro-rata asset basis at £1,500,000 and on a basis discounted for a minority holding, albeit not apparently for the mother’s life interest, at £448,000. For this wife to exit from a 16-year marriage, following a full contribution on her part, with her own exiguous resources plus a lump sum of only £30,000 would seem to me, even in the context of life-long, rent-free accommodation, to be wholly contrary to principle. Although in their oral evidence both the husband and the wife came across as particularly pleasant, reasonable people, the wife is not on good terms with the other members of the husband’s family; and for her to be condemned to a life-long relationship with the husband’s family company, whether under tenancy or under licence, would seem to me to be a miserable resolution, one of only very last resort.”

Mr Trowell’s submission is very simple. As he puts it in his skeleton argument:

“It must be right that after a marriage of 19 years with very significant contributions both directly to the farm and to the family, this wife has a very considerable entitlement. She limits her claim to 40% to reflect the husband’s inheritance.”

On that basis, as I have said, she would be content to meet half the school fees because, as Mr Trowell puts it, “that would be broadly fair on the basis of the capital division she seeks.”

The wife acknowledges that capital provision on this scale is likely to require the farm to be sold. In meeting the obvious counter-arguments she makes three points. First, that the husband had previously intended to retire at the age of 55. I have already dealt with this point. He does not. Secondly, that neither of the children want to be farmers. That is certainly the case at present and although I accept, as the husband presses on me, that they may change their minds, I think it most unlikely. Thirdly, that were the husband to suggest some appropriate mechanism she would not want to insist blindly on an immediate sale. I accept that: the difficulty, as I have already mentioned, is that the husband has thus far been unwilling or unable to apply himself to the problem.

Mr Chamberlayne on behalf of the husband submits that the proper approach in all the circumstances, and bearing in mind in particular that this is a farming case and that almost all the family assets were acquired by the husband by way of inheritance, is to look at the wife’s reasonable needs for accommodation and income, rather than adopting a percentage-based outcome. He asks rhetorically: Can the wife point to a single reported decision in which one party had inherited all the assets pre-marriage, and the other party’s award was based on anything other than reasonable needs? Praying in aid Wilson J’s decision in R v R as an example, he submits that the underlying ethos of what he calls “farming cases” is that where all the assets are inherited, it is appropriate to “invade” them, as he puts it, to the extent, but only to the extent, necessary to provide properly for the needs of what he calls the “outgoing spouse”.

The husband accepts, on this basis, that he must find the money to provide accommodation for the wife. Taking the cost at £400,000, and deducting the wife’s liquid assets of £60,000, he says that he should pay £340,000, a sum which he accepts he can raise by borrowing. But he disputes that the wife has any “need” for periodical payments. As Mr Chamberlayne puts it in his skeleton argument, the husband “fundamentally disagrees” with any suggestion of capitalisation of periodical payments: first, because “there is no maintenance to be capitalised” and, secondly, because there is in any event “no further free capital to pay a further lump sum in excess of the wife’s housing needs – even that sum is being raised by borrowing.” In other words, the husband is asserting, in the final analysis, that not merely is the wife’s claim capped by an assessment of her “reasonable needs” but that, even if her reasonable needs require more, she should be limited to the amount of the husband’s free capital.

I find myself unable to accept in their entirety either Mr Trowell’s approach or Mr Chamberlayne’s. I agree with Mr Chamberlayne that, in the particular circumstances of this case, the proper approach is to make an award based on the wife’s reasonable needs for accommodation and income. I do that, applying the approach adopted by Bennett J in Norris v Norris, not (pace Mr Chamberlayne) because of any principle that this is the approach to be adopted in farming cases, but because in the particular circumstances of this case that is the approach which most closely accords with the over-arching requirement of fairness, having regard to all the circumstances but in particular to:

Accordingly I reject Mr Trowell’s argument for division of the assets on a percentage basis. But equally I reject Mr Chamberlayne’s attempt to limit the wife’s claim to the amount of the husband’s free capital. This is a case where the wife’s reasonable needs require to be met: no more and no less. There is no justification for leaving her, after this marriage and bearing in mind everything she has done and, in relation to the children, everything she is continuing to do, with anything less than what she needs.

What then are the wife’s needs? In terms of accommodation her need is, I find, for a house of the kind she is looking for, in the area where she is looking, and which is going to cost her something of the order of £400,000 (before costs, stamp duty and other expenses). In terms of income her need is, I find, for £10,000 per annum, this being the difference between the income of £15,000 or so which, accepting Mr Chamberlayne’s approach, I think she will be able to obtain in due course and an annual budget of £25,000 (that being her figure of £27,750 adjusted so as to exclude in particular those items which are referable to the children). This is not an extravagant figure by any means, but in assessing what this wife needs I am entitled to have some regard to the fact that, as she readily accepted in the witness box, the family has always lived extremely frugally.

The wife’s free liquid resources as shown in the Schedule amount to £54,419: £22,340 in the bank, premium bonds worth £30 and a NFU bond worth £32,049. True it is that if the husband pays all the school fees she will be able to have recourse to that part of the money in the bank – £11,686 – which she has hitherto earmarked for that purpose. But she has unpaid legal costs of £22,668 to find, and it is going to take her a little while to get her income up to £15,000, so in part she is going to have to live on her capital. She will also have to meet costs, stamp duty and other expenses amounting to £20,000 or thereabouts. She needs some cushion for contingencies and emergencies. Thus my approach is to assume that the wife will pay all the incidental costs and expenses of her purchase of a new property out of her own resources, but that otherwise her resources should not be brought into account in determining the amount of the capital provision that her husband ought to make for her.

For all these reasons I have concluded that the fair order in all the circumstances is an order that the husband pays the wife the sum of £400,000, representing the cost of a new property, together with a further sum of £175,000, rounded down from £176,000 which is the capitalised ‘Duxbury’ figure on an annual sum of £10,000. The aggregate lump sum of £575,000, when added to the wife’s existing assets of £70,678, represents a little over 25% of the family assets, the vast bulk of which, as I have said, was brought into the marriage by the husband from his inheritance.

In addition to that lump sum there will be orders for payment of maintenance for each child in the agreed sum of £4,000 and orders that the husband pays their school fees. It is appropriate in all the circumstances to direct that the maintenance is in each case to continue until the end of secondary education or completion of a first degree or comparable course, whichever is the later.

I will hear counsel further, if they wish, on the precise terms of the order.