In divorce cases, courts—and ideally the parties—seek a clean break, meaning they end both emotional and financial ties. However, this is not always possible.
Often, one spouse is financially weaker, frequently because of a joint decision during the marriage, such as leaving work to care for children. In these situations, the court may order spousal maintenance (also called periodical payments) to ensure both parties’ needs are met after divorce.
Maintenance may take the form of ongoing monthly payments for a set period (the term) or a one-off lump sum payment, known as capitalisation.
Questions to ask when approaching maintenance issues:
- Is the case suitable for a Clean Break?
- If not, should spousal maintenance be paid?
- If the answer is yes to the above, how much and for how long?
- Is there money available to capitalise maintenance payments and should it be capitalised?
‘Duxbury’ calculations come into play at stage 4 of the test. The name comes from the case of Mr and Mrs. Duxbury (see below) which established this principle of how maintenance payments could be capitalised. To be clear, just because there is money available to capitalise the maintenance obligation, it does not mean that should happen. There needs to be enough for the couple to meet their own needs first. In effect, that capital sum is surplus to what they require to purchase a property to live in. It is also surplus to any other essential need.
However, in the event that the answer to question 2 is yes, spouses have determined the answer to question 3 and 4 is yes. Then the Duxbury calculation can be used to work out an appropriate lump sum for a better-off party to pay the financially weaker party. This is in place of periodical payments. As a result, this achieves a clean break.
Duxbury v Duxbury [1987] Fam 62
In Duxbury v Duxbury, the husband (H) and wife (W) were married for 22 years and enjoyed a very high standard of living, with H a millionaire and W not working. The marriage ended after both had extra-marital affairs. H accepted that W, who was cohabiting with a new partner in the former family home, should maintain a comfortable standard of living similar to that during the marriage.
As both parties wanted a clean break and W had no income, a lump sum was considered appropriate. W’s accountant developed a computer programme to calculate the sum by multiplying W’s annual needs by her statistical life expectancy. They also factored in inflation and investment returns.
The Grounds
The judge gave no weight to W’s cohabitation and instead focused on her reasonable needs. He ordered H to pay a £600,000 lump sum in addition to transferring the family home. H appealed on two grounds.
First, H argued that the judge wrongly exercised his discretion by failing to give sufficient weight to W’s cohabitation with a man who might benefit from the capital payment. The court rejected this argument, holding that how W chose to spend her money was irrelevant because the sum was calculated solely to meet her needs. The court upheld this decision on appeal in Duxbury v Duxbury.
Second, H argued that the judge should not have ordered provision entirely by way of capital. He suggested that the court should instead have ordered a smaller lump sum combined with periodical payments, given W’s cohabitation.
The Court of Appeal dismissed this ground as “odd,” noting that it would achieve the opposite of H’s intention. The court also questioned how any reduction could be justified. Under Matrimonial Causes Act 1973, particularly section 25, the court conducts a financial—not moral—exercise. As conduct such as cohabitation is generally irrelevant to the financial calculation, the appeal failed.
As above, a Duxbury calculation is best suited for spouses wishing to achieve a clean break, and they have the means to settle the case by way of a lump sum. If the paying spouse does not have the capital (money in the bank or savings) to pay a lump sum, then it is not a feasible outcome. Therefore you will likely need to return to spousal maintenance payments.
Drawbacks of the Duxbury Calculations
When approaching maintenance, courts ask several key questions:
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Is the case suitable for a clean break?
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If not, should the court order spousal maintenance?
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If so, how much should the payer pay and for how long?
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Is there sufficient capital to convert the maintenance into a lump sum?
A Duxbury calculation—derived from Duxbury v Duxbury—arises at stage four. It provides a method for capitalising maintenance into a lump sum. However, the mere existence of capital does not mean the court should capitalise maintenance. The parties must first use their assets to meet their own needs, such as purchasing suitable housing.
If the court decides that maintenance should be paid and that surplus capital exists, it can apply a Duxbury calculation to determine a lump sum that the wealthier spouse pays to the financially weaker spouse instead of ongoing payments. This approach achieves a clean break.
Update to the Duxbury Calculations
The Duxbury calculations have now been reduced to ‘tables’ which are reproduced annually, considering any relevant changes. The tables can be found within the ‘Family Law: At a Glance Volumes’. It is of course important to appreciate that there can be no substitute for taking specialist advice from a Financial Advisor. In doing so, you will be able to ascertain the accuracy of the Duxbury calculation.
Support
If you need assistance reaching a financial settlement with your soon-to-be ex-spouse, please contact a member of our team. We will advise you on the appropriate next steps and explain how Blanchards Law can help.
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