Principles the Court Uses in Ancillary Relief

1457 words (6 pages) Essay in Finance Law

02/02/18 Finance Law Reference this Law Student

Jurisdiction(s): United Kingdom

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When deciding what if any orders to make it must give its first consideration to any minor of the marriage.  In s25 (1) MCA 1973 it states;

It shall be the duty of the court in deciding whether to excersis its powers under sections 23, 24 or 24a above and, if so in what manner to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.

A dependant child will have the need to have a home and to be maintained.  The court will consider which parent will bring up the child up on a regular day to day basis and assess their income in doing so.  The requirement of a home for a child would be given consideration if the court has to consider making an order in reguard to the matrimonial home or property owned.

The Landmark case in recent years in Ancillary Relief was the case of White v White 2000.  In previous cases the courts took the approach that in the breakdown of the marriage the financially weaker party was to have her reasonable needs or requirements met and nothing further.  The House of Lords said courts should not focus on one factor as it had previously and the objective should be a fair outcome.  The House of Lords rejected the idea of the starting point of equal division and preferred to let the judge in each case weigh up the individual facts of each case against the eight factors in s25 MCA.  Meaning all the eight factors are of equal importance at the outset and loss or gain relevance and importance according to the individual facts of the case.  Lord Nicols went onto say

“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 his yardstick of equality of division.  As a general rule, equality should be departed from only if, and to the extent that, there is a good reason for doing so.”

In s25 (2) MCA there are eight factors to which the court must pay particular regard to, when considering what order to make in relation to a spouse.

    1. 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, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire.. The income of each spouse from wage slips or bank statements would be assessed.  Any future inheritances a spouse
    2. The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
    3. The standard of living enjoyed by the family before the breakdown of the marriage;
    4. The age of each party to the marriage and the duration of the marriage;
    5. Any physical or mental disability of either of the parties to the marriage;
    6. The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;.
    7. The conduct of each of the parties, if that conduct is such that it would in the opinion of the court is inequitable to disregard it;
    8. In the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit for. . Which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

Income and future earning capacity of both spouses will influence any decisions the court will make.  If possible the courts are keen for parties to reach a ‘clean break’.  Meaning one spouse would not have any financial tie to the other.  In cases of

Recent Cases

Section 25 list of factors is not exhaustive and one factor is not put above another, they are all of equal importance Piglowska v Piglowska.  The courts are encouraged to look at and consider all facts of the case.  Section 25(1) MCA 1973 encourages the court to do just that, also considering any third parties interests, new children or partner.  It also will consider any pre-nuptial agreements entered into K v K 2003.

In the case of White the good reason to depart form equality was due to the fact her father had loaned the couple money when they had started their married life, enabling them to purchase their first farm.  Mrs White was awarded a 40% of the total net marital assets to reflect this.

The cases of Miller v Miller and McFarlane v McFarlane expanded the approach of the courts further.  Previously the approach of dividing assets to meet needs of the parties housing and financial needs did not go far enough and there was often insufficient assets to meet the housing and financial needs of both parties.  The House of Lords said general principles to be applied when making financial awards were ‘needs, compensation and sharing.’ And where applicable the courts could compensate one party and redress any disparity arising from the way the marriage was conducted.  There has been a move away from the notion that if the wife was not working and primarily held the role of mother and housewife she contributed less to the marriage.  In H-J v H-J 2002 the court ordered an equal division. It was held that section 25(2) (f) “… does not suggest any bias in favour of the breadwinner. There must be an end to the sterile assertion that the breadwinner’s contribution weighs heavier than the homemaker’s.”

In the case of McFarlane, Mrs McFarlane was awarded an amount in exceeding what her reasonable needs would be as she gave up a lucrative job as a solicitor to be a housewife.  Her excess settlement was viewed as compensation for the fact she gave up a successful career.  McFarlane has been viewed as an exceptional situation.

In the case of Charman v Charman the division of the marital assets, which were substantial led to Mr Charman tried to argue he had made special contributions to the marital assets and they should not be included in any settlement.  Mrs Charman  was awarded a substantial £48 million pound settlement after the court ruled fairness must be the priority in dividing assets, no matter who had earned more during the course of the marriage, any money, property or investments made during the course of the marriage are all marital assets. The Charman’s had started off their married life with little and built up substantial assets and wealth during the course of their marriage and it would not be fair to award Mrs Charman any less for her role in the marriage. The courts have made clear that equality can apply to both matrimonial assets and non-matrimonial assets in this case but with more justification to depart from equality on non-matrimonial assets, such as inheritance by one spouse but if ring fencing these assets prevents the other spouses interests to be met without it or the marriage is a long one.  In S v S 2007 the judge was critised for ring fencing inheritance which prevented a fair outcome.

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, 617. 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. Accessed from 23/2/2011

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