Financial Order 3 & 4

Question 1

what should you deffo know in relation to 3?

Answer 1

Big money cases

Question 2

what is the priority in case where there isn’t much money

Answer 2

priority of children and providing homes for children as primary carer= PRIMARY CONCERN

Question 3

what have the big money cases allowed?

Answer 3

• allowed the courts to develop new guidelines and principles compared to middle income cases with little money.
• disect s25

Question 4

what has developed from big money cases?

Answer 4

developed 4 principles:
Needs
Sharing (Equality)
Compensation 
Autonomy

Question 5

what are all the big money cases?

Answer 5

• White v White [2000]
• Miller v Miller [2006]
• McFarlane v McFarlane [2006]
• Miller;McFarlane [2006]

Question 6

what happened in white v white?

Answer 6

-married 30 + yrs- divorced= 2 farms, 1 farm togev and 1 husband- husbands father helped purchase farm by dividing interest free loan

Assets – £4.5 million farm – joint business- of 4.5 wife owned 1.5 on her own

Mrs W spent less time in the business due to childcare responsibilities - joint bus but she spent less time

At first instance - £1 million – ‘reasonable requirements’
thats what wife got

-Coa increased to 1.5 mill and then they tried to appeal to hol but was dismissed

Question 7

principle of white?

Answer 7

overrding obj in this case = fairness

Question 8

what is meant by fairness?

Answer 8

isn’t a presumption of equal division, fairness doesn’t mean each should get 50% of assets, fairness doesn’t equal equality and also that’s the object of s.25 but any departure from equality u need TO JUSTIFY WHY

Question 9

what is the clear point, courts were tryna make in this case?

Answer 9

did not want to achieve equal divisions, court will check decision against yardstick principle- yardstick of equality of division’

Question 10

what case is yardstick confirmed in?

Answer 10

Lambert v Lambert [2002]
-Yardstick of equality = ‘cross-check’

-so it is an assessment, has fairness been achieved , now in cross check, all youre doing is saying when ur departying equality and then saying why that’s all ur doing ur justifying your departure from equality

Question 11

what happened in elliot v elliot?

Answer 11

Elliott v Elliott [2000] - confirmed that cross check applies to all cases (not just big money ones).

Question 12

how achieve in white?

Answer 12

had a farm 1 of the farms were brought jointly btw couple and other farm inhertited so court had o discusee what to do with inherited property and it questioned should an only spouse be able to keep this this is justify a departure from equality and in doing so the court should CONSIDER nature value etc read as written

So in this case in white v white the departure from equality was justified on fact that some of the assets has been inherited

Question 13

what is the real change in white v white?

Answer 13

No distinction to be drawn between contributions of childcare/home making and economic contributions.= equal contrib

Question 14

what happened in Lord Nicholls?

Answer 14

So if a wife states children he goes work an earns money hes not aloud to keep money cos earnt it because their contribution is ee as equal

Question 15

reasons for departing in this case?

Answer 15

Farms had been purchased with money provided by the husband’s family

W’s reasonable requirements should not be a ceiling

Question 16

interesting about white?

Answer 16

there were 4.6 mill worth of asses made up of all this, wifes assts seen as 1.5 mill , wife $1mill but ur owed 1.5 mill ull get les under a finaical order than u would under partnership law

Question 17

what was the inherited farm?

Answer 17

reason for division in equality-and said that that belongs to the husband- joined assets she is entitled to though. white v white, law moved on but this about ‘no distinc’ breadwinner- principle for white- yardstick in other cases

Question 18

what happened in miller v miler?

Answer 18

• Married for 3 years, no children
• husband had affair, he was wealthy
• he got pay £13 mill before got married and during m12-18 mill and
• mrs m awarded 5 mill of that assets they had

-She got 34% of marital request , so court took mid point and 12- 18 then awarded her 34%, they ignored the money that he brought to the marriage

Question 19

why did they ignore money he made?

Answer 19

• The reason for the breakdown of the marriage was immaterial
• Mrs M entitled to a share of the assets created during the marriage (marital aquest)- home maker , breadwinner, equal, white case
• Promises from Mr M that Mrs M would always live a comfortable lifestyle were ignored by crts,fact that length of marriage also key it was only 3 yrs
• high award is justified because dc the marriage there had been a huge creation of assets between 12 and 18 mill pounds she nevr worked during the marriage but under white she doesn’t have to, but divdision of qual justified, :

per Lord Nicholls – On account of the work carried out by Mr Miller prior to the marriage
per Baroness Hale – because the key assets had been generated solely by the husband during a short marriage.

-Youll find in high wealth cases wife will normally get 35% or so

Question 20

what happened in McFarlane v McFarlane [2006]?

Answer 20

• Married for 16 years and they had had 3 children
• Both had successful careers but Mrs M gave up her job to look after the children
• The couple had £3 million worth of assets and the husband earned £750,000 per year

-He was acountat she soliciort she gave up her job to look after children home maker bread children, unemploured during
Court saif the starting point due to length of marriage starting oint= equal dividosn this would mean each part would get 1.5

Question 21

Principles flowing from the case?

Answer 21

Equal division of capital due to the length of the marriage

This would mean:

• each party would be due £1.5 million
• Mr M would continue to earn £750,000
• Mrs M is without an income

This was viewed as an unfair result and Mr M ordered to pay Mrs M an annual payment on top.- so she got very large periodical payments

Question 22

what about miller and mcfarleane ?

Answer 22

The appeals from Miller and McFarlane were heard together in the House of Lords.

Question 23

The following principles were established in appeals?

Answer 23

• The principles in White applies to all marriages
• To achieve fairness, the rationales of
  (a) needs = cross yard check,
  (b) compensation = should wife be comp for lack of pension etc cos she hasnt worked during marriage etc
  (c) sharing should be applied to each case =and each spouse is entited to share of the partnership and that should equal in equal shares unless there is a reason not to
  3. Not all property is to be treated equally (although all must be considered).- distinc btw martital and non martial whats fair to have and not
  4. Clean break/financial independence for each party-so court trying to achieve that cutting ties between the two partie,

Question 24

what is the first principle?

Answer 24

First Principle: Sharing
-remember miller miller very short marriage only 3 years and they dsiccused miller v miller to justify equl or unequal sharing whether short marriage or not

i. Distinguish between short and long marriages when considering division of assets.
ii. Is there a good reason to depart from equality?

Question 25

how long is a short mariage and long marriage?

Answer 25

A short marriage is generally something up to 10 yrs so if u ahev 10yrs = medium/logn term and over 10 yrs equal sharing is more likely to happen

Question 26

what will courts focus on for short marriage?

Answer 26

So what happens is eg have marriage that 3 yrs court will focus on which is known as a martial aquest- assets generated during marriage,

Question 27

what will court focus on with longer mariages?

Answer 27

As it gets longer 40yrs court will take into account all assetss even those derive out fo marriage shorter marriage= marital aquest but as goes on so pre martial assets

Question 28

what do you need to think about when thinking about sharing?

Answer 28

When u think about sharing u need to think about equality and u need to think is there a good reason to depart from equality/ depart from equal sharing?

Question 29

what is the overral objective?

Answer 29

OVERAL OBJECTIVE OF FINAICAL ORDER= TOA AACHIEVE FAIRNESS BTW PARTIES- so what ur asking is if youd epart from equal quality does that achieve fairness?

Question 30

what do you look at btw short marriage and long marriage?

Answer 30

So if u got this principle- short marriage just loking at whatc reated during marriage longer =more blurred lines between what is amrital and no n marital prop

Question 31

examples of sharing?

Answer 31

McCartney v Mills McCartney [2008] – division from equal bc money acquired before marriage K v L [2011] – inherited money-lots of money 59 mill but lvied very modest life reason for departing from eqali Miller v Miller [2006] – assets derived from husband’s work White v White [2000] – contribution of husband’s family-inherited farm and also one of the farms was bought with money given by the husbands father= interest free loan Charman v Charman [2007] – H was outstanding businessman-husband was an outstanding business man that was sen as a reason to depart from equality he made 130 mill pounds during the marriage and wife got 36% of it Dharamshi v Dharamshi [2001] – business created from H’s parents-again was a business created from the assets if parents from the husband that was seen as a reason to depart from equality B v B [2008] – inherited money -couple that money had was mainl the wifes inhertienace, inheritance property to depart from equals Sorrell v Sorrell [2006] – pre-marriage assets/husband generated assets-case of one party made an outstanding contribution and in P v P (Inherited Property) [2004] – Inherited farmland- there was an inherited farm reason to depart from equality Generally courts don’t like selling income generating assetss

Question 32

what about examples of this?

Answer 32

also the nature of the assetss and that ties in with inherinted farmland so if ur asset is ur business court unlikel to make u sell it because that is ur income

Question 33

iii. What is meant by the ‘sharing principle’?

Answer 33

Charman v Charman [2007] - it is unusual to get 50% equal sharing order but the equal sharing principle comes from this idea that marriage is a partnership of equals and if u are equal in your marriage then you should be entitled to an equal share of the assests

Question 34

what is the emphasis of marriage as partnership equals?

Answer 34

idealistic view law says m means equality - starting point 50% - each party is entitled to an equal share ‘unless there is good reason to the contrary’ (See Miller;McFarlane)-

Question 35

what is meant by extraordinary contributions?

Answer 35

EXTROADINARY contributions not the same as jus dont mean working hard it means someone has made an outstanind g contributins, e.g husbands made immense wealth during their marriage and they want that wealth creation to be seen as an outstanding contrib= he should obtain more

Question 36

case for extraordinary contributions?

Answer 36

Cowan v Cowan [2001]- contribution in building up a business was exceptional -he was allowed to keep more of assets bc of his otustadning contrib

Question 37

what happened in court appeal?

Answer 37

In court of appeal – not fair to say breadwinner is superior to homemaker, 1st instance erred conducting appraisal and then conduct- conduct is only considered if? -Lord Nicholls ‘Parties should not seek to promote a case of “special contribution” unless the contribution is so marked that to disregard it would be inequitable. A good reason for departing from equality is not to be found in the minutiae of married life.’

Question 38

what happened in 1st instance

Answer 38

1st instance lambert said he weren’t a genius but he ahd worked very hard etc and that justified unqualy ivison of assets coa said not god enough just good businessman need to be extroadinary so in end wife got 50% WHICH IS

Question 39

what was this also applied to which case?

Answer 39

- Charman v Charman [2007] - husband made 130mill and he was an extraordinary business man , the court also said in charman a special contribution can be non financial, you can have a non fincail special contribution - the husband was awarded more than the wife on the basis of his ‘special contribution’ to creating the wealth of the family - £130 million.

Question 40

what approved lambert?

Answer 40

- Miller;McFarlane [2006] – approved Lambert

Question 41

what happened in the miller appove?

Answer 41

no different btw breadwinner and homemaker

Question 42

what did court of appeal say? for special contrib case?

Answer 42

charman - special contrib- he got 65.3% wife 33%- should be 55-65 and other party 35-45 when get special contribution Needs to be more than just hard work like in lambert, word genius not used whereas charman it was used.

Question 43

v. Emphasising the distinction between marital and non-marital property?

Answer 43

q: when couple gets divorced should all assets be taken into account or just the ones acquired in marriage?

Question 44

Should all assets be taken into account on divorce? i.e. should we distinguish between marital and non-marital property?

Answer 44

u should say these are all my assets and these should be seen as non marital assets because I inherited them

Question 45

What is marital property?

Answer 45

marital property = marital aquest - assets acquired during marriage e.g marital home becomes martial aquest even though it is pre marriage asset

Question 46

What is non-marital property?

Answer 46

assets before and after marriage also includes inherited property during marriage and includes any wealth created after the marriage -non marital prop is that is not excluded but it should be used to meet needs e.g

Question 47

In Charman – ‘all assets relevant’ – ‘needs’ come first but fairness prevails?

Answer 47

all assets relevant and needs come first , e.g marital prop only 10000 but non martial of inheritence worth 1 mill - martial wont satisfy needs as every1 wants clean break so court will take into account non mar You can delve into non mar- but fairness prevails, you only do this when needed to satisfy needs

Question 48

so what does one party need to satisfy?

Answer 48

So one parties needs might justify a departure from equality

Question 49

what happened in k v l?

Answer 49

- K v l – equal sharing to marital assets but not usual in sharing contrib to non mar prop - non matronmal assrts will be used to SATISFY NEEDS

Question 50

a. What assets are needed to meet needs?

Answer 50

- divide non marital and marital assets | - non martial to meet needs?- if yes then origin becomes irrelvant

Question 51

b. Are non-marital assets needed? If so, what do you consider?

Answer 51

the length of the marriage when u look at status of non marital assetsm

Question 52

c. Do the status of non-marital assets justify a departure from equality?

Answer 52

status changes over time - short marriages more of a chance, long marriages less likely to be non marital assets as mix up inheritence and money as longer you live on it etc

Question 53

d. Court should specify the departure from equality and check it is fair

Answer 53

Then if the court thinks it should depart then check to see if fair so fairness comes trough again

Question 54

what about guidelines?

Answer 54

These are guidelines only….- can use pre acquired assets if necc

Question 55

How is non-matrimonial property excluded from the pool of assets?

Answer 55

2 views 1. Robson v Robson [2010] (view taken in Charman) u ppol all asets and exclude non matri 2. Jones v Jones [2011] - no non-matrimonial assets - favoured by the lower courts in exams better to do robson - look at both and then relate for needs and fairness as jones party will try and say everything non mar

Question 56

Can non-matrimonial property ever become matrimonial property?

Answer 56

- we dealt with that over long marriages, blurred lines - Miller case shows it - Miller;McFarlane [2006] – ‘The source of the assets may be taken into account but its importance will diminish over time.’

Question 57

Robson v Robson [2010]?

Answer 57

longer parties used less likely, see as matronaml prop- always has to think is it fair that that wealth is taken awayf rom someone, if used it is it fari for long tme

Question 58

K v L [2011]?

Answer 58

Case about couple who lvied modestly –lord justice Wilson 1 thing tonote in white a v b were present in white but in k v l neither a b or c applied , white a and b and in white no abc or c

Question 59

what is the second principle?

Answer 59

Second Principle: Needs Lifestyle is relevant Where there are few assets Surplus of assets after ‘needs’ met

Question 60

what talk about needs what do you need to look at?

Answer 60

WHAT LIFESTYLE DID THEY HAVE IN MARRIAGE – needs= lifestyle = s.25

Question 61

what happeneds where there are fewer assets?

Answer 61

Where there are few assets the needs for the primary carer and cukdren come first there needs are paramount s.25

Question 62

what happens in big money cases?

Answer 62

In big money cases there is a surplus of assets after needs so u need to think of policy issues - how u should distribute the wealth & what the policy behind that - gives court wide discretionary power- unequal or share equally

Question 63

what happened in miller mcfarlene?

Answer 63

From Miller;McFarlane – needs generated by the relationship | -

Question 64

what happened in j v j?

Answer 64

J v J (financial orders: Wife’s wife’s long term needs) [2011] Wife awarded 46% of £4 million fortune – this was a higher award that she would have received under the ‘sharing’ principle due to her husband’s pre-acquired wealth.- she has high needs so trying to keep needs same after marriage

Question 65

what is the third principle?

Answer 65

Third Principle: Compensation

Question 66

what are you compensating for ?

Answer 66

Youre compensating for losses caused by the marriage e.g stay home mom= lost pension, undeveloped as overlaps with needs- its fair your compensated Needs most important

Question 67

what is the formula for 1st 2 points?

Answer 67

WHEN NEEDS DONE THEN SHARING – WHAT SHOULD BE DONE WITH THE SURPLUS- AND THEN WITHIN THAT JUST NEED TO THINKW EHTHER PARTY NEEDS TO BE COMPENSATED ITS ABSORBED INTO THE OTHER CATEGORIES

Question 68

what is meant by 3rd point | Focus is more on the assets generated rather than any lost earnings?

Answer 68

looking at loss not future potential earnings

Question 69

May not be applicable in the following circumstances:?

Answer 69

- where the wife has never worked (NA v MA [2006]) - where lack of work was a lifestyle choice (S v S [2006]) - where the career was not high earning (H v H [2007])

Question 70

what happened in p v p?

Answer 70

In P v P [2007] – not a ‘what if’ exercise | loss not what if- would have been gained

Question 71

compensation in exam?

Answer 71

Compensation quite a diff one, e.g wife high earner but stops= comp but blends with needs it is sep strand strand but deal with needs

Question 72

what about mcfarlene?

Answer 72

In McFarlane – wife was compensated for her loss of earnings

Question 73

what happened in farlene?

Answer 73

f- carreer just as highly paid as her husband but there went enough capital assets to compensate her but what they did do gave her an award, -extended periodical payments order to compensate 250,000 for a while as way to compensate , she didn’t have incomelookedaftet children

Question 74

what happened in h v h ?

Answer 74

In H v H [2014] - compensation for loss of earnings and the lack of ability to develop a pension outcome not fair- couldnt afford cos new marriage so stop periodical payments - relying on needs did not produce a fair outcome - wife awarded generous lump sum for after 22 year marriage

Question 75

In this case, Mostyn J, outlined 5 problems with the compensation principle:?

Answer 75

i. The word ‘compensation’ invoked ideas of wronged parties ii. Involved speculation as to what would have happened if the couple had not married iii. higher awards to wife who would have been high earners iv. hard to know what wife career could have ben v. McFarlane could have been decided without compensation- needs

Question 76

Principles flowing from the case.. Mostyn J…..?

Answer 76

‘I think that the principles concerning a compensation claim can properly be expressed as follows:— i) It will only be in a very rare and exceptional case where the principle will be capable of being successfully invoked. ii) Such a case will be one where the court can say without any speculation, i.e. with almost near certainty, iii) Proof of this track-record is key, that high career would have been during marriage iv) Once these findings have been made compensation will be reflected by fixing the periodical payments award (capitalised by Duxbury)

Question 77

Problems with the 3 principles:?

Answer 77

Each may suggest a different outcome Reviewed in Charman v Charman [2007

Question 78

Fourth Principle: Autonomy

Answer 78

Fairly new one not really 1 of strands but creeping in and this is lil abit clean breaks but also prenuptial agreen

Question 79

what happened in v v v?

Answer 79

V v vsaid automy should eb fourth principe, and been discussion abdout qweight in prenup agreement

Question 80

what case can it also be seen in?

Answer 80

Can also be seen in K v L [2011] - Wife’s shares had been used during the marriage and they had not become ‘marital’ property - husband only awarded a small percentage because the way they conducted marriage- some assets u do not want to share- he didnt use it during marriage therfore still hers

Question 81

One last big money case:?

Answer 81

McCartney v Mills McCartney [2008] - Married in 2002 – marriage lasted 4 years - One child - Paul McCartney said to be worth £400 million - Impact of short marriage - Little income made during the marriage (no sharing) - Compensation not applicable - Award on the basis of needs – awarded £24 million

Question 82

McCartney v Mills McCartney [2008] has?

Answer 82

all the elements

Question 83

what happned in the last case?

Answer 83

Paul didn’t actuall generate huge amount of martial income as didn’t do much she tried to claim comp as she felt her career has damaeged but it flourished as marriage to him - sharing wasn’t applicable bc there was so much no matrominal propso left with award of needs which were 24 mill she tried to claim more than that and was mianly made up of houses and she got a lump sum, so bc it was a short marriage impact of short marriage is that only mat prop due to sharing he hadn’t actually made huge amount of income compared to his wealth she weren’t awarded any comp so she just got her NEEDS!