Financial Order 5 & 6

Question 1

What is a clean break orderwhat does s.25A(1) MCA and Schedule 5, para 23(2) CPA 2004?

Answer 1

• There is no ongoing financial responsibility , known as a once and for all u can never go back
• is clean break approp or not?- just an option
• achieved by distrubting assets = financial independance e.g lump sum orders/ trasnfer of house
• Only applies to spousal support (not children)

Question 2

what 2 cases show support?

Answer 2

Minton v minton talks about avoiding bitteness ther is some support that when there is ongoing in creates bad feeling

Clutton v clutton reinforces, not something that needs to be strived for just considered

Question 3

What does baroness in miller & diff btw cleanbreak and pp?

Answer 3

provides certainty and security have house forever- cant go back and claim

-If get pp and person loses job it stops - go back for variation which causes unpleasantness compared to clean

Question 4

when we think about clean breaks what should we really try to avoid?

Answer 4

A court will try and avoid ongoing periodical payments

Question 5

what happened in Matthews v Matthews [2013] ?

Answer 5

clean break made whenever possible-

Question 6

when is a delayed clean break useful?

Answer 6

doesn’t come into effect until some point in future to allow u to get back on ur feet , under s.25A(2) MCA/ Schedule 5, para 23(3) CPA 2004 is possible

Question 7

what are u aiming for with delayed clean break?

Answer 7

financially indepednant but without creating hardship, but Not always possible

Question 8

what should you consider with delayed clean break?

Answer 8

• wehther person has job
• u need to consider there furutre earning potention, reasonable for them to acquire but you
• probably wouldn’t take into account potential inheritance because it is not certain enough

Question 9

what if clean break not possible?

Answer 9

If a clean break is not possible (as in McFarlane) it may involve the parties going back to court to seek a variation

Question 10

examples of clean breaks?

Answer 10

Robson v Robson [2010]
-unreliable husband, couldnt be relied for pp

A v L [2011]
where neither party has any money - so no point having ongion financial rels

Murphy v Murphy [2009]
where a party can afford a lump sum payment- so avoided pp

Question 11

what is Safety net: Nominal Orders?

Answer 11

– set up nominal and u can always go back for variationpayment

e.g ,have nominal for 1p a year and then u can go back for avriation at any point u can go back for more,

Question 12

when might you use safety net?

Answer 12

If mother with children self sufficient at time but then loses job at time of divorce 2 yrs later

wouldnt use clean break as children are involved use nominal instead

Question 13

advantages of clean break?

Answer 13

• pursue their own careers-

Emotional reasons- good for u - wont be response for periodical payments

• Lump sums better if a party wishes to remarry- would get more than if u did pp as stops when u remarry,
• Avoids problems of hardship-avoids 1 party being under finaical hardship

Question 14

2. What are the disadvantages?

Answer 14

No security for future-Once u had clear break no security for future

Question 15

Situations where a clean break is appropriate?

Answer 15

When continuing support offers no benefit

Question 16

clean break approp case?

Answer 16

Ashley v Blackman [1988]
- Maintenance would only result in the reduction of state benefits-husand had hardly any money the small amount she would ahvre ecived would just reduced her state benefits so clean break was approp

-Matthews v Matthews [2013]
One party unlikely to change their economic state

• husband was on lowe income wife on higher income even if the wife lost her job husband would ahev been unlikely to support her so clean break was approp
• Short, childless marriages

-The wealthy
Duxbury calculation-calculate lumpsum and calculate how uch income in produces and then wife gets that amount of lump sum so a Duxbury calc only for wealthy couples how much interest will say £1,000000 will generate is that enougnfor wife to live on rest of life that wil be wife to live on rest of lfie

-Both parties are financially independent
Burgess v Burgess [1996]
wife = doctor/husband = solicitor – grown up children- therefore no need for periodical

-Antagonism between the parties

Question 17

Situations where a clean break is inappropriate?

Answer 17

use nominal order here

-Young children
- Suter v Suter and Jones [1987]
Young children and limited assets
-
Uncertainty over the financial future of one party
- M v M [1987]
47 year old wife – not worked for 20 years
-
Lengthy marriage
- SRJ v DWK [1999]
27 year marriage – wife never worked

• To achieve fairness (Miller;McFarlane)
• compensating for lack of income and thereofore wouldn’t be fair fair, for her to have ongoing periodical payments but it has made her unhappy.

Question 18

6- what is popularity of pre nuptial agreements?

Answer 18

Popularity increased over 20yrs or so –reflect cts desire for couples to be automous (individuality) there is a form of private ordering

Question 19

how were pre nups taken into account?

Answer 19

pre nups were taken into account but weren’t given much weight

Question 20

what is the prblems is that with the sharing principle ?

Answer 20

left the wealthy very vunerable – wealthy people had no protection of assets, prenups allow assets to be protected

Question 21

2014 Law Commission Report -qualifying prenuptial agreement?

Answer 21

And it’s a doc that aims to regulate finances on divorce breakdown of marriage , so what u have is a qnp , and these qna can be made before or after marriage

Question 22

What is a pre-nuptial agreement?

Answer 22

• pre-marriage contract
• determines what happens to property on divorce
• may limit the amount one party can claim
• Can have after marriage normally before
• U need to be aware of after but we deal with ones before
• Really the aim of the agreement

Question 23

what is pre nup contrary to?

Answer 23

Contrary to public policy

-cause taking away courts power , also it anticipated the breakdown of marriage even before couple got it(not very helpful)

Question 24

Leading case for prenup?

Answer 24

Radmacher v Granatino [2010]-– it was from this point that courts gave weight after this case to prenup – also noted in this case that the uk was the only country not to recognise prenup agreements

Question 25

outcome on case?

Answer 25

First instance decision
-held that very little weight shuld be given to prenup, prenup carried very little weight he was awarded 5 mill and reason for little weight bc no independent advice, lack of full disclosure

• Court of Appeal decision
  
  • gave credit for his role as father, but not in his own right-disagreed and said prenup should be given weight and reward reduced to 1 mill and did give credit for role of father but not in his own right,
• Supreme court had to decide on the weight that should be given to prenup -so it agreen with coa so regardless of no indep advice/discolure the prenup was still up held
• so the supreme court said u were right to ask in pricnle whether the lack of disclosure had any material effect but in this case no bc the husband was fully aware of the significance and he would not be unfair to limit his awards so even if hadn’t had full disclosure as long as the pary is aware of what signing away that’s all you need

Question 26

what case ties in with automy?

Answer 26

BN v MA [2013] – ‘autonomy’ is extremely relevant

this is the courts upholding automony, idnividucal choice respectful individual decisions, so if u got someone educated intelligenet sophisticated then been if u haven’t go full disclosure legal advice u are likely to uphold prenup, so essentiallyt have to look at each vase as a seperate

Question 27

what happened Post Granatino ?

Answer 27

the courts can uphold a pre-nup but it also leaves scope to depart from the agreement.

Question 28

Arguments that a party can use to depart from a pre-nup agreement include?

Answer 28

1. Pressure to enter agreement - closer u are to marriage date = more pressure
2. Not fully aware of the facts or the effect of the pre-nup-maybe lang diffuclt might not be aware what ur signin
3. Unforeseen events- prenup to say both gonna work and had child but 1 stopped - prenup might be fair when signed but circumstances make that change like

= PRENUP=COULD BE NVALID

Question 29

The weight the court attaches depends on two factors?

Answer 29

1. The circumstances surrounding the making of the agreement

2. Fairness of the agreement

Question 30

what is meant by the circumstances surrounding the making of the agreement?

Answer 30

Lack of statutory guidelines- case law-Granatino-
both husband and wife must enter into it with freewill without influence or pressure and informed of its implications. Things we need to take into account

Question 31

what are things we need to take into account with lack of stat?

Answer 31

-Free will
-Undue influence
-Pressure- date of wedding
-Emotional state
-Age-20’s marrying 50;s are likely to be sufferening under influence maturirt etc
-Maturity-do u understand how marriage works and implcaitos of breakdown of marriage- married before
Married before-
Would the marriage have gone ahead without the agreement?-last one takes u back to pressure

Question 32

Also in Granatino (on vitiating factors)?

Answer 32

courts wont uphold if any evidence of duress,
- fraud ur promision
- cant deliver , misrep ur mis rep the amount of assets that u have
U need to make sure that u both have

LEGAL AND FULL DICLOSURE

Question 33

what are the court seeking to find?

Answer 33

The court is seeking to find out if the parties made a free and informed decision to enter into the contract.

Question 34

On the subject of receiving financial and legal advice?

Answer 34

well it is advisable that u have advice but there is no requirement as there ano stat guidelines but if u don’t have legal advice , ur leaving self open to claim that other party didn’t really understand

Question 35

cases comparison on legal advice?

Answer 35

• In grantino there was no legal advice but it was upheld and in
• v n v they just confirmed that lack of legal advice would not invalidate the prenup
• Case were prenup not upheld –kremen she was pressured wife just didn’t understand what she was signing

Question 36

what happens Sa v pam-?

Answer 36

I am satisfied that the wife freely entered into it with a sufficiency of advice to enable her to appreciate its implications.’
- upheld prenup= u can see lack of consitency

Question 37

On the subject of disclosure?

Answer 37

It is difficult to define how much disclosure is required as each case turns on its facts

Question 38

question for subject on disclosure?

Answer 38

Q: Did the party have the material information to decide whether to sign the document?-board that’s really what ur asking- doesn’t mean u have to have full disclosure/advice what u need is enough info

Question 39

cases for disclosure?

Answer 39

-BN v MA [2013]
‘a sufficiency of disclosure to enable a free decision to be made’

GS v L [2011] -parties did not understand the agreement- neither husband or wife was aware

Grantino- wasn’t full disclosure

Question 40

2. Fairness of the agreement?

Answer 40

The pre-nup may not be regarded as fair by the courts.

Question 41

what do courts have to decide with fairnes?

Answer 41

the courts have to decide whether or not the prenup is fair- overrding need for fairness when theres a conflict btw what courts think there and prenup there might be a problem

Question 42

what are three points?

Answer 42

1. Children
2. ‘Needs’ and ‘Compensation’
3. Displacing the ‘sharing’ principle

Question 43

what about children?

Answer 43

cannot use prenup to cease short obligations towards children-prenups and children don’t mix

Question 44

what about ‘Needs’ and ‘Compensation’?

Answer 44

Recognition in generation ,there is a conflict with needs and comp – conflict if ur remarriage and sign prenup what happens if ur husband goes on to create a lot of money and in effect u signed ur rightway out of any part of that even tho courts will see that u created it

Question 45

what about Displacing the ‘sharing’ principle?

Answer 45

That’s what a prenup is doing – misplacing -Confirm property interests at the time of the marriage
Contrast ‘allocated money yet to be earned in a way which was disproportionately in favour of the earner rather than the home maker’ (BN v MA [2013])
also allocated with money yet to be earned as not fair without it

Question 46

what happened in luckwell?

Answer 46

Luckwell v Limata [2014]
Harsh pre-nup leaving the husband with no home, income, capital, borrowing capacity and debts.
Pre-nup that husband would not have any claim on wife’s property.
Husband had received legal advice – no duress or non-disclosure
The court described his situation as one of ‘real need’

took dad out of pov, would be unfai for kids to see that

Question 47

Standard french prenup

Answer 47

Z v Z (No.2) [2011]
-Wife held it was unfair to hold them to the French agreement and argued for equal sharing.

Husband, relying on Granatino, that the agreement excluded equal sharing and should be upheld.

Question 48

exam usual percentages?

Answer 48

Court gave 40% assets to wife , now youll find courts will give wives between 30 and normall 35% but normally when u have case miller mcfarlene white- CASE OF WEALTHY HUSBAND 30-35% IN EXXAM

Question 49

what happened in v v v 2011?

Answer 49

In V v V [2011]

Pre-nup allowed husband to keep all pre-marital wealth
Approx. £1 million
Pre-nup did not make provision for divorce or for the children of the family
Wife did not receive legal advice before entering into the agreement
Although assets were not valued, there was no evidence of non-disclosure
Both aware of the implications of the agreement
Wife in weaker bargaining position

Question 50

reasons for previous case?

Answer 50

Weight they were both intelligent and both aware of the impact of prenup and what it said so= principles from grantino and therefore prenupwas upheld so even tho wife in weaker bargaining position it didndt egfect the effect of the prenup and have toc ontrast it with case of kremen

Question 51

conclusions for prenup?

Answer 51

Pre-nups now have a place in UK law
- 2 yrs ago luckwell confirmed

but theya re not binding on the courts bc u cant oust the discretion of the courts , so tey have plac ein uk law, take into account but the court does not have to follow them it can depart from prenup in ful in part or can uphold if wants to

Question 52

Summary of when the courts will be unlikely to hold parties to their agreement?

Answer 52

1. A nuptial agreement cannot be allowed to prejudice the reasonable requirements of children
2. Court should respect parties’ autonomy and the court should not think it knows
   best- Overridng farines principle
3. Nothing inherently unfair in an agreement which seeks to preserve non- matrimonial property for one party.- So overtime the agreement may no
4. Over time the agreement may not be fair – unlikely that parties intended that
   one party should be left in real need-If prenup no longer current wont be upheld
5. Once a party’s needs have been addressed, any surplus assets are likely to
   be distributed in line with the nuptial agreement-Doesn’t really follow

Question 53

Post-Nuptial Agreements?

Answer 53

After marriage, but before breakdown-Rules are same just be aware u can have post nup but in exam probs talk about prenup as THATS GRANTEINTO

Question 54

when were post enforceable?

Answer 54

Only enforceable since Macleod v Macleod [2008]

Question 55

Final Conclusion-Law Commission Consultation Paper on QNAs (qualifying Nuptial Agreements)?

Answer 55

• contractually valid
• made in writing
• signed by both parties
• full and frank material disclosure
• legal advice
• if dont have these dont have qualifying nup agreeemnt

Question 56

what would you advice overall with nuptial agreem?

Answer 56

So if ur advicing someone u would adicve for full fiscolure and full advice but doesn’t mean ur prenup isn’t valid if u don’t have those things.