Thomas v Thomas

Thomas v Thomas [1995] 2 FLR 668 has often been cited as the leading authority on the issue of judicious encouragement of third parties.

In this case, Mr Thomas had taken steps to tie up his assets and income by providing the family home as a guarantee to meet his liabilities and receiving only small dividends from his family-run company.

At first instance, the trial judge had made an order compelling the husband to meet the wife’s capital needs, despite his liquidity issues as a result of the guarantee to Lloyds and made a Periodical Payments Order to the wife for the children. However, this left the husband income-deficient every month and the husband appealed the order.

On appeal, the court took a robust approach and held that the husband would be able to rely upon his family to meet the deficiency in his income by changing the company’s policy and paying him more.

Waite LJ carefully confirmed that the court will not act in direct invasion of the rights of a third party, nor will it put undue pressure for the third party to act in a way which enhances the means of a maintaining spouse – however, the court will not act in total disregard of the potential availability of wealth from sources owned or administered by others.

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