Financial provision and divorce

Question 1

What are the key MCA sections regarding this

Answer 1

s25, s22, s23, s28, s31

Question 2

What are the financial consequences of divorce

Answer 2

• Certainty v discretion
• Distribution and redistributions
• Assets are rarely excessive for most ppl, so little distribution
• Need to future independence
• Need to reduce conflict
• Reoccurring themes- private negotiation v judicial determination, clean break v ongoing financial relationship, equal division based on contribution v unequal division based on need

Question 3

What does MCA 1973 s25 1 say about child welfare

Answer 3

matters to which court is to have regard in deciding how to exert powers under ss 23, 24 (24A, B, E) above and,

• if so what manner
• to have regard to all circumstances of the case
• First consideration given to welfare
• Minor of any child of the family who has not attained the age of 18

Question 4

what does MCA s25 2 say about child welfare

Answer 4

As regards the exercise of the powers of the court under section 23(1)(a), (b) or (c), 24 [24A or 24B] above in relation to a party to the marriage, the court shall in particular have regard to the following matters—

(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;
(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 made by each of the parties to the welfare of the family, including any contribution made 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) in the case of proceedings for divorce or nullity of marriage, 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.

Question 5

What financial orders are available

Answer 5

Financial provision orders- periodical payments order, lump sum order
Property adjustment orders
Pension orders- order may be made on or after the grant or decree or nullity, divorce, judicial or separation. Shall not take effect until decree is absolute.

Question 6

what does s22 of the MCA 1973 say about financial orders

Answer 6

“…on a petition of divorce, nullity of marriage or judicial separation, the court may order one spouse to pay maintenance to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of the presentation of the petition and ending with the date of the determination of the suit [i.e. pronouncement of decree absolute] as the court thinks reasonable”.

Question 7

Are financial orders available for CP

Answer 7

yes, sch 5, part 8 CPA 2004

Question 8

What are periodical payments

Answer 8

Orders in favour of spouses s23 1-2 MCA 1973
Court may order either spouse to make unsecured periodical payments to other or to secure periodical payments to the other ie require an item of property or capital to be designated as security for the payments, to be realised if the payer defaults

Question 9

What are orders in favour of children

Answer 9

Orders in favour of children of the family- court can make periodical payments in favour of a child of the family (provided the provisions of the Child Support Act 1991 not applicable)

Question 10

What does s31 MCA say about discharge of certain financial orders

Answer 10

Where the court has made an order to which this section applies…the court shall have the power to vary or discharge the order or to suspend any provision thereof temporarily and to revive the operation of any provision so suspended.”

Question 11

What are lump sum orders

Answer 11

Lump sum orders s23 (1) MCA 1973-

´ Court may order either party to pay a lump sum or sums to the other, or for the benefit of any child.
´ Rare for children (Although see V v V (Child Maintenance) [2001]).
´ Can be payable in instalments.
´ Can be more than one lump sum in one order.
´ Most common use of this provision is for adjusting the parties’ capital assets
´ e.g. If the husband owns shares, the court may wish the benefit of a proportion of these to be given to the wife.
´ Or if matrimonial home is the only capital asset and it is sold or the wife leaves and the husband remains, the court will commonly make an order for the payment of a lump sum representing the value of that part of the assets of which the other party is to be given the benefit.
´ Advantage is that the payment is final and there are no continuing problems of enforcement – particularly important if the parties’ relationship is bitter.

Question 12

What are property adjustment orders

Answer 12

Property adjustment orders- s24 MCA 1973

´ Court may order either party to the marriage to transfer property to the other party.
´ A property Adjustment Order can take various forms
´ Property Transfer Orders s24(1)(a)
´ May be used to bring about a clean break
´ Settlement Orders s24(1)(b)
´ Court can order a spouse to settle property for the benefit of the other party or child

Question 13

What happens in ‘Powers of Sale’ 24a MCA

Answer 13

´ Where the court makes under section 23 or 24 of this Act a secured periodical payments order, an order for the payment of a lump sum or a property adjustment order, then, on making that order or at any time thereafter, the court may make a further order for the sale of such property as may be specified in the order, being property in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest, either in possession or reversion.

Question 14

What is a deferred sale of home

Answer 14

• Mesher order- postponement of the exercise of a trust for sale of a property followed by division of the proceeds of that sale when youngest child of family reaches 18 years of age/leaves full time edu
• Dorney Kingdom v Dorney Kingdom 2000- Thorpe LJ decided to grant a Mesher order because the family home was spenny enough that women could be rehoused and man would be compensated in the future when the property was sold and kids of age

Question 15

What does B v B (mesher order) 2003 tell us

Answer 15

the court declined to grant a Mesher order.
´ It held that it was not appropriate to do so because the woman would make a significant contribution in the future by bringing up the child who was very young at the time of the court hearing.
´ Her own income and future career opportunities would be severely affected.
´ The man would very rapidly be able to recoup the cost to him of an outright transfer of the property to his ex-wife.

Question 16

What is a Martin order

Answer 16

´ When there are no children, the court can still make a similar order for one party to remain in the marital home and thus postpone the sale.
´ Martin v Martin (1978)
´ H was housed in council accommodation.
´ W was allowed to remain in occupation of family home.
´ A deferred sale under a Mesher order would not have given her sufficient money to purchase a new home for herself. She too would have required to be re-housed by the local authority.
´ No clean break.

Question 17

What are pension orders

Answer 17

´ Court has power to make 2 kinds of orders in relation to pensions
´ Pension attachment orders s23 MCA 1973
´ Enables the court to ‘earmark’ some or all of the spouses future pension in favour of the other.
´ Unpopular, usually superseded by pension sharing orders.
´ Pension sharing orders s24B MCA 1973
Re-adjusts the spouses’ pension entitlements and enables each party to make future pension arrangements independently of the other

Question 18

What are the judicial principles of FP

Answer 18

´ Child Welfare
´ Fairness
´ Clean Break
´ Equal sharing and the stellar contribution
´ Compensation and the legitimate expectation
´ Marriage length
´ Business and investment assets
´ Matrimonial property and non matrimonial property
´ Flexibility

Question 19

What does s1 1 and 52 of the MCA say about children in a family

Answer 19

´ s1(1) In this Act—
“child”, in relation to one or both of the parties to a marriage, includes an illegitimate. . . child of that party or, …of both parties;
“child of the family”, in relation to the parties to a marriage, means—
(a) a child of both of those parties; and
(b) any other child,
´ not being a child who is placed with those parties as foster parents by a local authority or voluntary organisation, who has been treated by both of those parties as a child of their family

Question 20

What are the key cases regarding nature of the child

Answer 20

´ Suter v Suter Jones [1987]
´ Court must always consider all the circumstances always bearing in mind the children’s welfare and then try to make a just and fair settlement between the adult parties
´ Richardson v Richardson (no 2) [1996]
´ Upheld the decision of Thorpe J who had set aside a consent order, and extended a periodical payment order in favour of the wife, so she could complete her responsibility for bringing up her two daughters whilst they were at college. “In my judgment, the fact that children of the family are no longer minors is not decisive, what is decisive is that they are still dependent.”
´ Crozier v Crozier [1994]
´ Any clean break was only between the between the parties of the marriage and could not be in respect of children.
´ No provision for clean break between parent and child.

Question 21

What are the ideas around fairness and clean break

Answer 21

´ Idea first came to prominence in Minton v Minton [1979] where Lord Scarman said,
´ “The law now encourages spouses to avoid bitterness after family break-down and to settle their money and property problems. An object of the modern law is to encourage each to put the past behind them and to begin a new life which is not overshadowed by the relationship which has broken down.”
´ If no children then get a clean break
´ Law Commission found widespread support for this view (Law Com No 112, para 30).

Question 22

What does white say about fairness

Answer 22

Lord Nicholls-Then fairness, like beauty, lies in the eye of the beholder

there is no place for discrimination between husband and wife and their respective roles…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.” (at 599)

Question 23

What does Lord Nicholls say about the yardstick of equality in white

Answer 23

“A practical consideration follows from this. Sometimes, having carried out the statutory exercise, the judge’s conclusion involves a more or less equal division of the available assets.
´ More often this is not so.
´ More often, having looked at all the circumstances, the judge’s decision means that one party will receive a bigger share than the other.
´ Before reaching a firm conclusion and making an order along these lines, a judge would always be well advised to check his tentative views against the yardstick of equality of division.”

Question 24

What does Lord Nicholls say about equal sharing after marriage in Mcfarlane para 16

Answer 24

´ Lord Nichols in McFarlane at para 16: A third strand is sharing. This ‘equal sharing’ principle derives from the basic concept of equality permeating a marriage as understood today. Marriage, it is often said, is a partnership of equals. In 1992 Lord Keith of Kinkel approved Lord Emslie’s observation that ‘husband and wife are now for all practical purposes equal partners in marriage’: R v R [1992] 1 AC 599 This is now recognised widely, if not universally. The parties commit themselves to sharing their lives. They live and work together. When their partnership ends, each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less. But I emphasise the qualifying phrase: ‘unless there is good reason to the contrary’.
The yardstick of equality is to be applied as an aid, not a rule

Question 25

What does mcfarlane 13-14 say about compensation

Answer 25

Although less marked than in the past, women may still suffer a disproportionate financial loss on the breakdown of a marriage because of their traditional role as home-maker and child-carer.
When this is so, fairness requires that this feature should be taken into account by the court when exercising its statutory powers.

Question 26

Can investment assets be part of family assets

Answer 26

yes mcfarlane

Question 27

What does mcfarlane say about matrimonial and non matrimonial property

Answer 27

´ McFarlane para 21: Matrimonial property means the matrimonial home plus, property acquired during the marriage otherwise, than by gift or inheritance… By section 25(2)(a) the court is bidden to have regard, … to the property and financial resources each of the parties to the marriage has or is likely to have in the foreseeable future’.
´ For non matrimonial property at para 23, the duration of the marriage will be highly relevant. The position regarding non-matrimonial property was summarised in the White case [2001].

Question 28

What does Cowan 2001 say about stellar contributions

Answer 28

´ “The underlying idea is that a spouse exercising special skill and care has gone beyond what would ordinarily be expected and beyond what the other spouse could ordinarily have hoped to do for himself or herself, had the parties arranged their family lives and activities differently.”
´ Equal sharing or stellar contribution?

Question 29

Name some key matrimonial asset cases

Answer 29

McFarlane 2006/North 2008/Parlour 2004/Miller 2006/Sharp 2017

Question 30

Give a summary of how distribution is approached

Answer 30

´ White: ‘reasonable requirements’ for housing, continuing to run a business, and income. Fair for woman? Equal sharing principle See Nichols L and the ‘yardstick of equality of division’
´ North: The wife mismanaged her £ – disapproval? Not fair on man?
´ Vaughan: financial order to wife on appeal, as needs not properly considered by court; fair on woman?
´ Yates: wife had mismanaged and then suffered loss. = not fair on man?
´ Cowan: Stellar contributions? Fair on man? Depart from equal shares?
´ Formula or Discretion? Parlour says first Statute. Is this fair for woman?
´ McFarlane: Fairness was overarching objective, considering need, compensation & sharing: fair for woman?
´ Miller: wife’s legitimate expectations; husbands conduct; fair on wife? Not fair on husband? Depart from equal shares?
´ Compensation for the relationship generated disadvantage?