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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (other Judges) >> D v D (financial remedy case) [2020] EWFC B24 (20 May 2020) URL: http://www.bailii.org/ew/cases/EWFC/OJ/2020/B24.html Cite as: [2020] EWFC B24 |
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Sitting at Wandsworth Family Court
Putney London SW15 2SU |
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B e f o r e :
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| Mrs D |
Applicant |
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| - and – |
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| Mr D |
Respondent |
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Ms Francesca Dowse (instructed by Stowe Family Law LLP) for the Respondent
Hearing dates: 19th, 20th March 2020
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Crown Copyright ©
District Judge John Smart:
Background facts
"As you are aware, information has recently been shared with children's services that your 17-year-old daughter E had been locked in the family bathroom by her stepmother D. We have no details regarding the specifics of the incident and this is third party information shared by your younger daughter C with another professional.…"
Assets and Liabilities
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Open positions
Evidence
Submissions
(1) Husband
(2) Wife
i) In respect of 'needs' the starting point was Lord Nichols' well known judgment in White v White [2007] EWCA:'Clearly and it is well recognised, there is some overlap between the factors listed in s25(2). In a particular case there may be other matters to be taken into account as well. But the end product of this assessment of financial needs should be seen, and treated by the court, for what it is: only one of several factors wot which the court is to have particular regard. This is so, whether the end product is labelled financial needs of reasonable requirements. In deciding what would be a fair outcome the court must also have regard to other factors such as the available resources and the parties' contributions. In following this approach the court will be doing no more than giving effect to the statutory scheme.ii) Further, Lord Nichols in Miller, McFarlane, at para 11:
When the marriage ends fairness requires that the assets of the parties should be divided primarily so as to make provision for the parties' housing and financial needs, taking into account a wide range of matters such as the parties' ages, their future earning capacity , the family's standard of living and any disability of either party. Most of these needs will have been generated by the marriage, but not all of them. Needs arising from age of disability are instances of the latter.iii) Baroness Hale in Miller, McFarlane [2006] UKHL 14 at paras 136 - 138:
136. Thus where the principles of fairness and non-discrimination and the 'yardstick of equality' which established [in White]. But the house was careful to point out (see p 605f) that the yardstick of equality did not inevitably mean equality of result. It was a standard against which the outcome of the section 25 exercises was to be checked. In any event, except in those cases where the present assets can be divided and each can live independently at roughly the same standard of living, equality of outcome is difficult both to define and to achieve. Giving half the present assets to the breadwinner achieves a very different outcome from giving half the assets to the homemaker with children.137. So how is the court to operate the principles of fairness, equality and non-discrimination in the less straightforward cases? As Lord Justice Ward has argued non-judicially ("Have the House of Lords abused Cinderella? Their Contribution to Divorce Law"), lecture at King's College, London, 23 November 2004, given that we have a separate property system, there has to be some sort of rationale for the redistribution of resources from one party to another. In my view there are at least three. Any or all of them might supply such a reason, although one must be careful to avoid double counting. The cardinal feature is that each is looking at factors which are linked to the parties' relationship, either causally or temporally, and not to extrinsic, unrelated factors, such as a disability arising after the marriage has ended.138. The most common rationale is that the relationship has generated needs which it is right that the other party should meet. In the great majority of cases, the court is trying to ensure that each party and their children have enough to supply their needs, set at a level as close as possible to the standard of living which they enjoyed during the marriage (note that the House did not adopt a restrictive view of needs in White: see pp 608g to 609a). This is a perfectly sound rationale where the needs are the consequence of the parties' relationship, as they usually are. The most common source of need is the presence of children, whose welfare is always the first consideration, or of other dependent relatives, such as elderly parents. But another source of need is having had to look after children or other family members in the past. Many parents have seriously compromised their ability to attain self-sufficiency as a result of past family responsibilities. Even if they do their best to re-enter the employment market, it will often be at a lesser level than before, and they will hardly ever be able to make up what they have lost in pension entitlements. A further source of need may be the way in which the parties chose to run their life together. Even dual career families are difficult to manage with completely equal opportunity for both. Compromises often have to be made by one so that the other can get ahead. All couples throughout their lives together have to make choices about who will do what, sometimes forced upon them by circumstances such as redundancy or low pay, sometimes freely made in the interests of them both. The needs generated by such choices are a perfectly sound rationale for adjusting the parties' respective resources in compensation.iv) And at para 144:
In general, it can be assumed that the marital partnership does not stay alive for the purposes of sharing future resources unless this is justified by need or compensation. The ultimate objective is to give each party an equal start on the road to independent living.v) In terms of meeting needs, the court could and should look beyond assets acquired during the marriage, but to look to relevant assets from which needs may be met: Sir Mark Potter P in M-D v D [2009] 1 FLR 810:
Para 53. . . For that purpose the focus had to be upon their minimal future needs rather than observing and applying the distinction, urged on behalf of the husband and accorded considerable weight by the Judge, between the matrimonial property or 'acquest' and what each of the parties brought to the marriage by way of pre-acquired property.
The law
"In truth this was a marital and also a business partnership in which, by their efforts and commitment, each contributed to the full for 33 years, and any attempt to weigh the respective contributions of their effort is idle and unreal."
"Sections 23 and 24 of the Matrimonial Causes Act 1973 empower the court, on granting a decree of divorce and in certain other circumstances, to make financial provision orders and property adjustment orders. Financial provision orders, under section 23, include orders that one party to the marriage shall make payments to the other party. The payments may be periodical, either secured or unsecured, or lump sums. Property adjustment orders, under section 24, include orders that one party to the marriage shall transfer property to the other party. Section 24A empowers the court to make ancillary orders for the sale of property.Section 25, as substituted by section 3 of the Matrimonial and Family Proceedings Act 1984, sets out the familiar list of matters to which the court is to have regard in deciding how to exercise these powers. Section 25(1) provides that it is the duty of the court in deciding whether, and how, to exercise these powers to have regard to all the circumstances of the case. [emphasis added]. First consideration is to be given to the welfare of any child of the family under the age of 18. Section 25(2) provides that, as regards the exercise of these powers in relation to a party to the marriage, the court shall in particular have regard to [spacing added for clarity]:
"(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, 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;(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 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;(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) ... 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."Section 25A requires the court to consider the appropriateness of a "clean break". Sections 25B-25D, inserted by section 166(1) of the Pensions Act 1995, make provision regarding benefits under pension schemes."
"…the legislation does not state explicitly what is to be the aim of the courts when exercising these wide powers. Implicitly, the objective must be to achieve a fair outcome.[emphasis added] The purpose of these powers is to enable the court to make fair financial arrangements on or after divorce in the absence of agreement between the former spouses: see Thorpe LJ in Dart v Dart [1996] 2 FLR 286, 294. The powers must always be exercised with this objective in view, giving first consideration to the welfare of the children." Earlier at p.599 he had said "Everyone would accept that the outcome on these matters, whether by agreement or court order, should be fair. More realistically, the outcome ought to be as fair as is possible in all the circumstances. But everyone's life is different. Features which are important when assessing fairness differ in each case. And, sometimes, different minds can reach different conclusions on what fairness requires. Then fairness, like beauty, lies in the eye of the beholder."
"EqualitySelf-evidently, fairness requires the court to take into account all the circumstances of the case. Indeed, the statute so provides. It is also self-evident that the circumstances in which the statutory powers have to be exercised vary widely. As Butler-Sloss LJ said in Dart v Dart [1996] 2 FLR 286, 303, the statutory jurisdiction provides for all applications for ancillary financial relief, from the poverty stricken to the multi-millionaire. But there is one principle of universal application which can be stated with confidence. In seeking to achieve a fair outcome, there is no place for discrimination between Husband and Wife and their respective roles. Typically, a Husband and Wife share the activities of earning money, running their home and caring for their children. Traditionally, the Husband earned the money, and the Wife looked after the home and the children. This traditional division of labour is no longer the order of the day. Frequently both parents work. Sometimes it is the Wife who is the money-earner, and the Husband runs the home and cares for the children during the day. But whatever the division of labour chosen by the Husband and Wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party when considering paragraph (f), relating to the parties' contributions. This is implicit in the very language of paragraph (f): "the contributions which each ... has made or is likely ... to make to the welfare of the family, including any contribution by looking after the home or caring for the family". (Emphasis added.) 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. There are cases, of which the Court of Appeal decision in Page v Page (1981) 2 FLR 198 is perhaps an instance, where the court may have lost sight of this principle.
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. As a general guide, equality should be departed from only if, and to the extent that, there is good reason for doing so. The need to consider and articulate reasons for departing from equality would help the parties and the court to focus on the need to ensure the absence of discrimination.
This is not to introduce a presumption of equal division under another guise. Generally accepted standards of fairness in a field such as this change and develop, sometimes quite radically, over comparatively short periods of time. The discretionary powers, conferred by Parliament 30 years ago, enable the courts to recognise and respond to developments of this sort. These wide powers enable the courts to make financial provision orders in tune with current perceptions of fairness. Today there is greater awareness of the value of non-financial contributions to the welfare of the family.
There is greater awareness of the extent to which one spouse's business success, achieved by much sustained hard work over many years, may have been made possible or enhanced by the family contribution of the other spouse, a contribution which also required much sustained hard work over many years. There is increased recognition that, by being at home and having and looking after young children, a Wife may lose for ever the opportunity to acquire and develop her own money-earning qualifications and skills. In Porter v Porter [1969] 1 WLR 1155, 1159, Sachs LJ observed that discretionary powers enable the court to take into account "the human outlook of the period in which they make their decisions". In the exercise of these discretions "the law is a living thing moving with the times and not a creature of dead or moribund ways of thought".
Despite these changes, a presumption of equal division would go beyond the permissible bounds of interpretation of section 25. In this regard section 25 differs from the applicable law in Scotland. Section 10 of the Family Law (Scotland) Act 1985 provides that the net value of matrimonial property shall be taken to be shared fairly between the parties to the marriage when it is shared equally or in such other proportions as are justified by special circumstances. Unlike section 10 of the Family Law (Scotland) Act 1985, section 25 of the 1973 Act makes no mention of an equal sharing of the parties' assets, even their marriage-related assets. A presumption of equal division would be an impermissible judicial gloss on the statutory provision. That would be so, even though the presumption would be rebuttable. Whether there should be such a presumption in England and Wales, and in respect of what assets, is a matter for Parliament."
"Inherited money and propertyI must also mention briefly another problem which has arisen in the present case. It concerns property acquired during the marriage by one spouse by gift or succession or as a beneficiary under a trust. For convenience I will refer to such property as inherited property. Typically, in countries where a detailed statutory code is in place, the legislation distinguishes between two classes of property: inherited property, and property owned before the marriage, on the one hand, and "matrimonial property" on the other hand. A distinction along these lines exists, for example, in the Family Law (Scotland) Act 1985 and the (New Zealand) Matrimonial Property Act 1976.
This distinction is a recognition of the view, widely but not universally held, that property owned by one spouse before the marriage, and inherited property whenever acquired, stand on a different footing from what may be loosely called matrimonial property. According to this view, on a breakdown of the marriage these two classes of property should not necessarily be treated in the same way. Property acquired before marriage and inherited property acquired during marriage come from a source wholly external to the marriage. In fairness, where this property still exists, the spouse to whom it was given should be allowed to keep it. Conversely, the other spouse has a weaker claim to such property than he or she may have regarding matrimonial property.
Plainly, when present, this factor is one of the circumstances of the case. It represents a contribution made to the welfare of the family by one of the parties to the marriage. The judge should take it into account. He should decide how important it is in the particular case. The nature and value of the property, and the time when and circumstances in which the property was acquired, are among the relevant matters to be considered. However, in the ordinary course, this factor can be expected to carry little weight, if any, in a case where the claimant's financial needs cannot be met without recourse to this property."
"(1) In seeking a fair outcome there is no place for discrimination between a Husband and Wife and their respective roles. Discrimination is the antithesis of fairness. In assessing the parties' contributions to the family there should be no bias in favour of the money-earner and against the home-maker and the child-carer.(2) There can be different views on the requirements of fairness in any particular case. The Matrimonial Causes Act 1973 gives only limited guidance on how the courts should exercise their statutory powers. Primary consideration must be given to the welfare of any children of the family. The court must consider the feasibility of a "clean break". Beyond this the courts are largely left to get on with it for themselves. The courts are told simply that they must have regard to all the circumstances of the case. Of itself this direction leads nowhere. Implicitly the courts must exercise their powers so as to achieve an outcome which is fair between the parties.(3) The financial provision made on divorce by one party for the other, still typically the Wife, is not in the nature of largesse. It is not a case of "taking away" from one party and "giving" to the other property which "belongs" to the former. The claimant is not a supplicant. Each party to a marriage is entitled to a fair share of the available property. The search is always for what are the requirements of fairness in the particular case.(4) Several elements, or strands, are readily discernible. The first is financial needs. This element of fairness reflects the fact that to a greater or lesser extent every relationship of marriage gives rise to a relationship of interdependence. The parties share the roles of money-earner, home-maker and child-carer. Mutual dependence begets mutual obligations of support. When the marriage ends fairness requires that the assets of the parties should be divided primarily so as to make provision for the parties' housing and financial needs, taking into account a wide range of matters such as the parties' ages, their future earning capacity, the family's standard of living, and any disability of either party. Most of these needs will have been generated by the marriage, but not all of them. Needs arising from age or disability are instances of the latter.(5) In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes. The court seeks to stretch modest finite resources so far as possible to meet the parties' needs.(6) Another strand, recognised more explicitly now than formerly, is compensation. This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage. For instance, the parties may have arranged their affairs in a way which has greatly advantaged the Husband in terms of his earning capacity but left the Wife severely handicapped so far as her own earning capacity is concerned. Then the Wife suffers a double loss: a diminution in her earning capacity and the loss of a share in her Husband's enhanced income. This is often the case. 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. Compensation and financial needs often overlap in practice, so double-counting has to be avoided. But they are distinct concepts, and they are far from coterminous. A claimant Wife may be able to earn her own living but she may still be entitled to a measure of compensation.(7) 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. 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. The yardstick of equality is to be applied as an aid, not a rule.(8) This principle is applicable as much to short marriages as to long marriages: see Foster v Foster [2003] 2 FLR 299, 305, para 19 per Hale LJ. A short marriage is no less a partnership of equals than a long marriage. The difference is that a short marriage has been less enduring. In the nature of things this will affect the quantum of the financial fruits of the partnership. To confine the White approach to the "fruits of a long marital partnership" would be to re-introduce precisely the sort of discrimination the White case [2001] 1 AC 596 was intended to negate.(9) For the same reason the courts should be exceedingly slow to introduce, or reintroduce, a distinction between "family" assets and "business or investment" assets. In all cases the nature and source of the parties' property are matter to be taken into account when determining the requirements of fairness. But "business and investment" assets can be the financial fruits of a marriage partnership as much as "family" assets. The equal sharing principle applies to the former as well as the latter. The rationale underlying the sharing principle is as much applicable to "business and investment" assets as to "family" assets.(10) Matrimonial property and non-matrimonial property. By section 25(2)(a) the court is bidden to have regard, quite generally, to the property and financial resources each of the parties to the marriage has or is likely to have in the foreseeable future. This does not mean that, when exercising his discretion, a judge in this country must treat all property in the same way. The statute requires the court to have regard to all the circumstances of the case. One of the circumstances is that there is a real difference, a difference of source, between (1) property acquired during the marriage otherwise than by inheritance or gift, sometimes called the marital acquest but more usually the matrimonial property, and (2) other property. The former is the financial product of the parties' common endeavour, the latter is not. The parties' matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. So it should normally be treated as matrimonial property for this purpose. As already noted, in principle the entitlement of each party to a share of the matrimonial property is the same however long or short the marriage may have been.(11) The matter stands differently regarding property ("non-matrimonial property") the parties bring with them into the marriage or acquire by inheritance or gift during the marriage. Then the duration of the marriage will be highly relevant. The position regarding non-matrimonial property is that a judge should take it into account. He should decide how important it is in the particular case. The nature and value of the property, and the time when and circumstances in which the property was acquired, are among the relevant matters to be considered. However, in the ordinary course, this factor can be expected to carry little weight, if any, in a case where the claimant's financial needs cannot be met without recourse to this property.(12) In the case of a short marriage fairness may well require that the claimant should not be entitled to a share of the other's non-matrimonial property. The source of the asset may be a good reason for departing from equality. This reflects the instinctive feeling that parties will generally have less call upon each other on the breakdown of a short marriage. With longer marriages the position is not so straightforward. Non-matrimonial property represents a contribution made to the marriage by one of the parties. Sometimes, as the years pass, the weight fairly to be attributed to this contribution will diminish, sometimes it will not. After many years of marriage the continuing weight to be attributed to modest savings introduced by one party at the outset of the marriage may well be different from the weight attributable to a valuable heirloom intended to be retained in specie. Another relevant matter is the way the parties organised their financial affairs.(13) This difference in treatment of matrimonial property and non-matrimonial property might suggest that in every case a clear and precise boundary should be drawn between these two categories of property. This is not so. Fairness has a broad horizon. Sometimes, in the case of a business, it can be artificial to attempt to draw a sharp dividing line as at the parties' wedding day. Similarly the "equal sharing" principle might suggest that each of the party's assets should be separately and exactly valued. But valuations are often a matter of opinion on which experts differ. A thorough investigation into these differences can be extremely expensive and of doubtful utility. The costs involved can quickly become disproportionate.
(14) Accordingly, where it becomes necessary to distinguish matrimonial property from non-matrimonial property the court may do so with the degree of particularity or generality appropriate in the case. The judge will then give to the contribution made by one party's non-matrimonial property the weight he considers just. He will do so with such generality or particularity as he considers appropriate in the circumstances of the case.(15) In big money cases, the capital assets are more than sufficient to meet the parties' financial needs and the need for either party to be compensated when one party's earning capacity has been advantaged at the expense of the other party. In these cases, should the parties' financial needs and the requirements of compensation be met first, and the residue of the assets shared? Or should financial needs and compensation simply be subsumed into the equal division of all the assets? There can be no invariable rule on this. Much will depend upon the amounts involved. Generally a convenient course might be for the court to consider first the requirements of compensation and then to give effect to the sharing entitlement. If this course is followed provision for the parties' financial needs will be subsumed into the sharing entitlement. But there will be cases where this approach would not achieve a fair outcome overall. In some cases provision for the financial needs may be more fairly assessed first along with compensation and the sharing entitlement applied only to the residue of the assets. Needless to say, it all depends upon the circumstances."
"167….On the one hand, on Lord Nicholls's approach, non-matrimonial property is viewed as all property which the parties bring with them into the marriage or acquire by inheritance or gift during the marriage (plus perhaps the income or fruits of that property), while matrimonial property is viewed as all other property. The yardstick of equality applies generally to matrimonial property (although the shorter the marriage, the smaller the matrimonial property is in the nature of things likely to be). But the yardstick is not so readily applicable to non-matrimonial property, especially after a short marriage, but in some circumstances even after a long marriage.168 On the other hand, Baroness Hale's approach takes a more limited conception of matrimonial property, as embracing "family assets" (cf Wachtel v Wachtel [1973] Fam 72, 90 per Lord Denning MR) and family businesses or joint ventures in which both parties work (cf Foster v Foster [2003] 2 FLR 299, 305, para 19, per Hale LJ). In relation to such property she agrees that the yardstick of equality may readily be applied. In contrast, she identifies other "non-business-partnership, non-family assets", to which that yardstick may not apply with the same force particularly in the case of short marriages; these include on her approach not merely (a) property which the parties bring with them into the marriage or acquire by inheritance or gift during the marriage (plus perhaps its income or fruits), but also (b) business or investment assets generated solely or mainly by the efforts of one party during the marriage."
"152 My Lords, while I do not think that these arguments can be ignored, I think that they are irrelevant in the great majority of cases. In the very small number of cases where they might make a difference, of which Miller may be one, the answer is the same as that given in White v White [2001] 1 AC 596 in connection with premarital property, inheritance and gifts. The source of the assets may be taken into account but its importance will diminish over time. Put the other way round, the court is expressly required to take into account the duration of the marriage: section 25(2)(d). If the assets are not "family assets", or not generated by the joint efforts of the parties, then the duration of the marriage may justify a departure from the yardstick of equality of division. As we are talking here of a departure from that yardstick, I would prefer to put this in terms of a reduction to reflect the period of time over which the domestic contribution has or will continue (see Bailey-Harris, "Comment on GW v RW (Financial Provision: Departure from Equality)" [2003] Fam Law 386, 388) rather than in terms of accrual over time (see Eekelaar, "Asset Distribution on Divorce-Time and Property" [2003] Fam Law 828). This avoids the complexities of devising a formula for such accruals.153 This is simply to recognise that in a matrimonial property regime which still starts with the premise of separate property, there is still some scope for one party to acquire and retain separate property which is not automatically to be shared equally between them. The nature and the source of the property and the way the couple have run their lives may be taken into account in deciding how it should be shared. There may be other examples. Take, for example, a genuine dual career family where each party has worked throughout the marriage and certain assets have been pooled for the benefit of the family but others have not. There may be no relationship-generated needs or other disadvantages for which compensation is warranted. We can assume that the family assets, in the sense discussed earlier, should be divided equally. But it might well be fair to leave undisturbed whatever additional surplus each has accumulated during his or her working life. However, one should be careful not to take this approach too far. What seems fair and sensible at the outset of a relationship may seem much less fair and sensible when it ends. And there could well be a sense of injustice if a dual career spouse who had worked outside as well as inside the home throughout the marriage ended up less well off than one who had only or mainly worked inside the home."
"
(16) In Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 the House of Lords had identified three main distributive principles: need (generously interpreted), compensation and sharing. The yardstick of equality of division, identified by the House of Lords in White v White, had filled the vacuum that resulted from the abandonment of the criterion of 'reasonable requirements', but had now developed into the 'equal sharing principle'. Under the 'sharing principle', property should be shared in equal proportions unless there was good reason to depart from such proportions, therefore departure from equality was not departure from the principle, but took place within the principle (see paras [64], [65], [68])
(17) Since Miller and the development of the yardstick into the sharing principle, the court's consideration of the sharing principle no longer had to be postponed until the end of the process. The sharing principle could not, however, be a true starting point; as the judge had stated, the starting point of every enquiry in an application for ancillary relief was the financial position of the parties and was always in two stages: first computation and then distribution. Although it might be convenient for the court to consider some of the matters set out in s 25(2) other than in the order set out in the section, a court should first consider, with whatever degree of detail was apt to the case, the matters set out in s 25(2), namely the property, income (including earning capacity) and other financial resources. Irrespective of whether the assets were substantial, likely future income must always be appraised for, even in a clean-break case, such appraisal might well be relevant to the division of property that best achieved the fair overall outcome (see paras [65], [67]).
(18) Notwithstanding some remarks in Miller, and subject to the exceptions identified in that case, the sharing principle applied to all the parties' property, but to the extent that property was non-matrimonial there was likely to be better reason for departure from equality. The distinction put forward by Baroness Hale of Richmond in Miller between unilateral assets and other matrimonial property was for use in cases in which the marriage was short; its application in a case such as the present would be deeply discriminatory and gravely undermine the sharing principle (see para [66]).
(19) Each of the three distributive principles identified by the House of Lords in Miller could be collected from s 25 of the Matrimonial Causes Act 1973: the principle of need required consideration of the financial needs, obligations and responsibilities of the parties, the standard of living enjoyed by the family, the age of the parties and any physical or mental disability of either; the principle of compensation related to prospective financial disadvantage which some parties faced upon divorce as a result of decisions taken for the benefit of the family during the marriage; and the principle of sharing was dictated by reference to the contributions of each party to the welfare of the family, to the length of the marriage and, in an exceptional case, to the conduct of a party. However, it was as unnecessarily confusing to present a case of contribution as a positive type of conduct, which it would be inequitable to disregard, as it was to present a case of conduct as a negative or nil type of contribution (see paras [69]-[72]).
(20) Any irreconcilable conflict between the result suggested by one of the three principles, needs, sharing and compensation, and that suggested by another, must be answered by application of the criterion of fairness: when the result suggested by the needs principle was an award greater than the result suggested by the sharing principle, the former should in principle prevail; when the result suggested by the needs principle was an award of property less than the result suggested by the sharing principle, the latter should in principle prevail; irreconcilable conflict between the compensation principle and one of the others would be left for another case (see para [73]).
(21) In cases of very substantial matrimonial property it might be immediately apparent that the result of applying the sharing principle would immediately subsume the result of applying the principles of need and of compensation. In such circumstances the judge might well first consider distribution by reference to the sharing principle, and then shortly refer to the other principles. It was not the case that consideration of the discount from equality should play no part in the distributive exercise: a discount was nothing other than a departure from equality. The judge had in fact adopted a serial approach, considering all the factors set out in s 25, insofar as they were relevant, including the Husband's special contribution, arriving at a figure of £48m for the Wife, noting that this was 37% of the total assets, and concluding that such departure from equality was justified. That was a valid approach, but the judge would have been entitled to consider percentages at an earlier stage (see para [76]).
(22) The court did not agree with the approach suggested by Mance LJ in Cowan v Cowan [2001] EWCA Civ 679 of sharing the surplus of the assets after needs had been satisfied; in the large cases, it was probable that sharing, whether equal or not, would cater automatically for needs. There was also the grave practical objection that an approach that invited expensive concentration upon the value of assets and also elaborate presentation of needs would be the worst of both worlds (see para [77]).
(23) Special contribution had inevitably survived Miller, because the statutory requirement to consider contributions by each party to the welfare of the family would be inconsistent with a blanket rule that past contributions to its welfare must be accorded equal weight. However, the House of Lords had heavily circumscribed the situations in which it would be appropriate to find that one party had made a special contribution. The notion of special contribution could, in principle, take a number of forms, non-financial as well as financial, but in practice, for practical reasons, special contribution claims had thus far arisen only in cases of substantial wealth generated by a party's success in business during the marriage. In such cases the court would have regard to the amount of the wealth, which in some cases would be so extraordinary as to make it easy for the party who generated it to claim an exceptional and individual quality which deserved equal treatment; often, however, he or she would need independently to establish such a quality, whether by genius in business or in some other field. Sometimes, by contrast, it would immediately be obvious that substantial wealth generated during the marriage was a windfall, not the product of a special contribution. Neither in its method nor in its result had the judge's treatment of the Husband's special contribution been vulnerable to appeal (see paras [79], [80], [91]).
(24) Notwithstanding a suggestion by Baroness Hale of Richmond in Miller that the generation of wealth should not always qualify as a contribution to the welfare of the family, the usual conclusion, applicable in this case, was that wealth generated by a party during a marriage was the product of a contribution on his or her part to the welfare of the family. In any event, a party's property did not fall outside the court's redistributive powers in ss 23-25 of the Matrimonial Causes Act 1973 just because it was not the product of a contribution within the meaning of s 25. The distinction put forward by Baroness Hale of Richmond in Miller between unilateral assets and other matrimonial property was for use in cases in which the marriage was short, and had not been commended for use in other cases. Its application in a case such as the present would be deeply discriminatory and gravely undermine the sharing principle (see paras [81], [83]).
(25) The court was unable to identify any figure as a guideline threshold for a special contribution; a party's claim to have made a special contribution ought not to succeed by reference to something interpreted as effectively a presumption deriving from the court's identification of a threshold figure. However, the court was prepared to respond to the judge's call for guidance on the appropriate range of percentage adjustment to be made in which departure from equality was justified, although it ought to be borne in mind that fair despatch of some cases might require departure from the proposed range: it was hard to conceive that, where such a special contribution was established, the percentages of division of matrimonial property should be nearer to equality than 55%-45%; but also, following a very long marriage, fair allowance for special contribution within the sharing principle would be most unlikely to give rise to percentages further from equality than 66.6%-33.3%. If the contribution was special, it followed that it was unmatched, and, in principle, the greater the wealth the greater the extent to which it was unmatched, and to which it called for an unequal division under the sharing principle (see paras [87]-[90])."
"25A Exercise of court's powers in favour of party to marriage on decree of divorce or nullity of marriage(1) Where on or after the grant of a decree of divorce or nullity of marriage the court decides to exercise its powers under section 23(1)(a), (b) or (c), 24, 24A, 24B or 24E above in favour of a party to the marriage, it shall be the duty of the court to consider whether it would be appropriate so to exercise those powers that the financial obligations of each party towards the other will be terminated as soon after the grant of the decree as the court considers just and reasonable.
(2) Where the court decides in such a case to make a periodical payments or secured periodical payments order in favour of a party to the marriage, the court shall in particular consider whether it would be appropriate to require those payments to be made or secured only for such term as would in the opinion of the court be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party.
(3) Where on or after the grant of a decree of divorce or nullity of marriage an application is made by a party to the marriage for a periodical payments or secured periodical payments order in his or her favour, then, if the court considers that no continuing obligation should be imposed on either party to make or secure periodical payments in favour of the other, the court may dismiss the application with a direction that the applicant shall not be entitled to make any future application in relation to that marriage for an order under section 23(1)(a) or (b) above."
"Scope—The 'clean break' section is to be read with s 25(2)(a) to provide that earning capacity includes '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' with a view to a clean break. The court must consider:(i) termination: whether it is appropriate to terminate the financial obligations as soon after the decree as is 'just and reasonable';(ii) term: if periodical payments are to be made, whether they should be made or secured only for such period as to allow adjustment without undue hardship to termination (with or without a bar on the payee applying to extend the original term);(iii) dismissal: if there is no continuing obligation for periodical payments, the court may dismiss the application, with a direction under s 28(1A) that there be no future application for an order under s 23(1)(a) or (b).At any stage when the court is considering orders under s 23 or s 24, the court has a duty to consider whether an immediate or future clean break is appropriate. This principle was developed in Minton v Minton (1978) FLR Rep 461, HL and had survived White v White [2000] 2 FLR 981, HL to be reiterated in Miller; McFarlane [2006] 1 FLR 1186, HL. See also Robson v Robson [2011] 1 FLR 751, CA.
The statute is silent as to the circumstances in which it may be appropriate to make a clean break order. In C v C (Financial Relief: Short Marriage) [1997] 2 FLR 26, CA, the Court of Appeal summarised the proper approach to assessing whether a clean break order should be made, which depends on all the circumstances of the case, including the welfare of any minor child and the s 25 checklist factors. A short marriage will not of itself require a term order. If a term is appropriate, there must be evidence to support that conclusion, as opposed to hope or crystal ball gazing. If there is doubt about when self-sufficiency will be attained, it is wrong to require the payee to apply to extend the term. If there is uncertainty about the appropriate length of the term, the proper course is to impose no term but leave the payer to seek variation or discharge.
Therefore, a clean break order may be appropriate where there is evidence that the applicant is financially self-sufficient, or is expected to be in the near future, or where the parties are impecunious with no prospect of future financial contribution. In L v L (Financial Remedies: Deferred Clean Break) [2012] 1 FLR 1283, FD on appeal from the PRFD, a joint lives order was set aside in favour of a non-extendable term order of just over 2 years, where a 44-year-old Wife worked in an established business and retained a valuable farm that was capable of generating income, the children were subject to shared care arrangements and the Wife additionally expected to benefit from a family trust.
The Court of Appeal has expressed itself in favour of a clean break in Matthews v Matthews [2014] 2 FLR 1259, CA, where the imposition of a clean break was upheld on appeal. The Wife's claim for a nominal spousal maintenance was rejected where the Wife's earning capacity was found to be greater than the Husband's, despite her difficulties in finding employment and her poor credit rating. The submission that it was wrong in principle to impose a clean break (subject to child support) where there were dependent children aged 6 and 3 was rejected, as there was a clear presumption in favour of a clean break and the trial judge had taken all relevant circumstances into account. In Chiva v Chiva [2014] EWCA Civ 1558, the Court of Appeal dismissed a Wife's appeal, approving a clean break after 24 months where the Wife's future earning power was such that she could be expected to make up the loss of periodical payments at the end of 2 years. In Wright v Wright [2015] EWCA Civ 201, a Husband's variation application some years after a joint lives order, the Court of Appeal refused a Wife permission to appeal against an order that reduced her spousal maintenance, with termination in December 2018 when the younger child reached 14, the Wife having had since the divorce in 2006 to achieve self-sufficiency.
Therefore, clean break orders may no longer be thought to be inappropriate where there is a continuing responsibility to the housing and maintenance of dependent children".
(i) A spousal maintenance award is properly made where the evidence shows that choices made during the marriage have generated hard future needs on the part of the claimant. Here the duration of the marriage and the presence of children are pivotal factors.(ii) An award should only be made by reference to needs, save in a most exceptional case where it can be said that the sharing or compensation principle applies. (Also note here that 'needs' is a very flexible concept and may, if the circumstances of a case allow, permit, for example, the 'stockpiling' of maintenance to generate a stronger capital base or to make future pension provision: see Fields v Fields [2016] 1 FLR 1186, FD.)
(iii) Where the needs in question are not causally connected to the marriage, the award should generally be aimed at alleviating significant hardship.
(iv) In every case, the court must consider a termination of spousal maintenance with a transition to independence as soon as it is just and reasonable. A term should be considered unless the payee would be unable to adjust without undue hardship to the ending of payments. A degree of (not undue) hardship in making the transition to independence is acceptable.
(v) If the choice between an extendable term and a joint lives order is finely balanced, the statutory steer should militate in favour of the former.
(vi) The marital standard of living is relevant to the quantum of spousal maintenance but is not decisive. That standard should be carefully weighed against the desired objective of eventual independence.
(vii) The essential task of the judge is not merely to examine the individual items in the claimant's income budget but also to stand back and to look at the global total and to ask if it represents a fair proportion of the respondent's available income that should go to the support of the claimant.
(viii) Where the respondent's income comprises a base salary and a discretionary bonus, the claimant's award may be equivalently partitioned, with needs of strict necessity being met from the base salary and additional, discretionary, items being met from the bonus on a capped percentage basis.
(ix) There is no criterion of exceptionality on an application to extend a term order. On such an application, an examination should be made of whether the implicit premise of the original order of the ability of the payee to achieve independence had been impossible to achieve and, if so, why.
(x) On an application to discharge a joint lives order, an examination should be made of the original assumption that it was just too difficult to predict eventual independence.
(xi) If the choice between an extendable and a non-extendable term is finely balanced, the decision should normally be in favour of the economically weaker party.
"The situation of a dependant party may still be relevant. In Murphy v Murphy [2014] EWHC 2263 (Fam), the court rejected a term order for a Wife at 57 lacking capital and held that 'the fact of having children, and their obvious dependence in this particular case on their mother for their care, changes everything … The economic impact on this Wife is likely to endure not only until they leave school but, indeed for the rest of her life'. In Miller; McFarlane [2006] 1 FLR 1186, HL, it was held that a clean break should not be imposed at the expense of a fair result: where a party is likely to need financial support or is entitled to compensation, and capital assets are not available, periodical payments might properly be ordered."
"The facts of that case are very very far removed from the facts of the present, in that it was a case where the Husband had a very significant income and where the Wife's ability to earn was severely compromised by circumstances attending the breakdown of the marriage, which it is unnecessary for me to go into here. However, Mr Buck took us to the judge's discussion of the point of principle, which appears at para [36] of his judgment, where the judge was concerned with an appeal against the making of an order for periodical payments of the type which Mr Buck says ought to have been made in this case, that is to say a nominal order thereby keeping alive the possibility of an application for a variation in the event that the Wife's circumstances deteriorated during the minority of the child of the marriage. Wilson J said this at para [36]:
'Let me be frank: had I been the judge, I would have dismissed the Wife's application for periodical payments. The marriage was, in real terms, so short; the Wife is young and able-bodied and, even allowing for her responsibilities towards the child, so fully employable; and the capital award, particularly allowing for the purchase in West London and a third bedroom to assist in childcare (and later perhaps, if necessary, to generate income from a lodger), so large; that I would have considered it as appropriate for the court's powers so to be exercised as to terminate the Husband's further obligations towards the Wife forthwith. Until the dying moments of Mr Scott's submission, I was minded to allow the appeal in this regard. But he has driven me reluctantly to the conclusion that the nominal order is not appealable: for, although not my preference, it is not plainly wrong. I must accept that a fair number of my colleagues – be they High Court judges, circuit judges or district judges – would reasonably have exercised their discretion in favour of keeping alive, at least until the child was a teenager, the Wife's right to seek to inflate a nominal order for periodical payments to a substantive level. They would regard it as a reasonable precaution against unforeseen developments, taken primarily for the sake of the child. I stress, however, that the circumstances in which it would be apt to vary the order are indeed unlikely to arise: if, for example, the Wife fell seriously ill and if, by then, the Husband was again a substantial earner, then, yes, there might be a needs-based variation of the order, providing always that the court bore in mind the amount of capital for which, after so short a marriage, the Wife had by order relieved the Husband.'
(a) In Minton v Minton [1979] AC 593, 608) Lord Scarman said: 'An object of the modern law is to encourage [the parties] to put the past behind them and to begin a new life which is not overshadowed by the relationship which has broken down'.(b) Section 25A MCA 1973 was introduced by s3 MFPA 1984, and came into effect in October 1984, imposing on courts the duty to give active consideration to a clean break. In Matthews v Matthews [2013] EWCA Civ 1874 the Court of Appeal described the nature of that duty, per Tomlinson LJ:
"We are here concerned with an exercise of discretion but it is an exercise of discretion in which Parliament has indicated that there should be a clear presumption in favour of making a clean break, in the sense that that is something which the court is mandated to consider, whether it would be appropriate to bring about a complete break between the parties, so far as concerns financial matters, as an initial consideration"
(c) In Waggott v Waggott [2018] EWCA Civ 727 Moylan LJ said at paragraph 103 of the judgment:
"The "steer" provided by section 25A is clear because of the duty it imposes on the court under 25A(1), when making an order of the type(s) specified, "to consider whether it would be appropriate so to exercise those powers that the financial obligations of each party towards the other will be terminated as soon after the grant of the decree as the court considers just and reasonable". (emphasis added)
(d) At paragraph 133 of Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 Baroness Hale had said:
"[s]ection 25A is a powerful encouragement towards securing the court's objective by way of lump sum and capital adjustment (which now includes pension sharing) rather than by continuing periodical payments. This is good practical sense. Periodical payments are a continuing source of stress for both parties. They are also insecure…. It is also the logical consequence of the retreat from the principle of the life-long obligation. Independent finances and self-sufficiency are the aims". (Emphasis added).
"[1.177] The task of summarising some of the leading cases on what might be regarded as relevant conduct was made easier and more authoritative by the judgment of Stanley Burton J in S v S1. His Lordship had to consider whether or not the alleged conduct in that case should be taken into account. He was at pains to point out that he did not normally sit in the Family Division and so relied on the two expert counsel2 appearing before him. He dealt with the position as follows:''I have been told by Counsel that there are only rare cases in the reports where this has occurred. I have been taken to what I believe must be all of them. The examples given include:(i) Armstrong v Armstrong[1974] SJ 579: wife shoots husband with his shotgun with intent to endanger life.(ii) Jones v Jones[1976] Fam 8: husband attacks wife with a razor and inflicts serious injuries: there are financial consequences (wife rendered incapable of working).(iii) Bateman v Bateman[1979] 2 WLR 377: wife twice inflicts stab wounds on her husband with a knife.(iv) S v S[1982] Fam Law 183: husband commits incest with children of the family.(v) Hall v Hall[1984] FLR 631: wife stabs husband in the abdomen with a knife.(vi) Kyte v Kyte[1987] 3 AER 1041: wife facilitates the husband's attempted suicide.(vii) Evans v Evans[1989] 1 FLR 351: wife incites others to murder the husband.(viii) K v K[1990] 2 FLR 225: husband's serious drink problem and "disagreeable" behaviour led to the forced sale of the matrimonial home and serious financial consequences to the wife.(ix) H v H[1994] 2 FLR 801: serious assault and an attempted rape of wife by husband: and financial consequences because the consequent imprisonment of husband destroyed his ability to support her.(x) A v A[1995] 1 FLR 345: husband assaults the wife with a knife.(xi) C v C(Bennett J 12 December 2001 unreported): wife deliberately drugged husband to make him very sleepy and then while he was in a somnolent state placed a bag over his head, which she held in such a way that the husband could not breathe. Although it was found that the wife did not have an intent to kill, Bennett J concluded that the husband did believe that she was trying to kill him, and that her aim was to make him so believe.(xii) Al-Khatib v Masry[2002] 1 FLR 1053: husband guilty of "very grave" misconduct in abducting the children of the marriage in contempt of court.(xiii) H v H[2006] 1 FLR 990: very serious assault by husband on wife with knife, leading to 12 years' imprisonment for attempted murder and with financial consequences, namely destroying her Police career.''1 [2006] EWHC 2793 (Fam).2 Mr Nicholas Mostyn QC and Mr Philip Moor QC.[1.178] His Lordship's comments on these cases were as follows:''As will be seen, it is not suggested that there were any financial consequences from the conduct of which the Applicant complains in this case, which factor may have exacerbated, in the judgment of Scott Baker J, the facts in K v K referred to at (viii) above. However, that case apart, all of the conduct found in those cases appears of manifest seriousness. Apart from the statutory provision, and the words of Ormrod J in Wachtel quoted by Baroness Hale above, there is a certain amount of recurrent phraseology: "If the courts were in these circumstances not to discharge the order, the public might think that we had taken leave of our senses" (per Balcombe LJ at 355 in Evans at (vii) above): Sir Roger Ormrod in Hall at (v) above describes (at 632) the conduct as "gross and obvious" which has "nothing to do with the ordinary run of fighting and quarrelling in an unhappy marriage" and which the judge's "sense of justice required to be taken into account": Bennett J in C at (xi) above, asks whether "it would be repugnant to any sense of justice for the wife to receive any award at all". Mr Mostyn QC pointed to the words of Sir George Baker P in W v W[1976] Fam 107 at 110D when he referred to the sort of conduct which would cause the ordinary mortal to throw up his hands and say "… surely that woman is not going to get a full award": and, in the course of submissions, he suggested a test of applying what he called the "gasp factor".''[1.179] One case which was, perhaps surprisingly omitted from this pantheon of wrongdoing was Clark v Clark1 which was described by Thorpe LJ as 'one of the most extraordinary marital histories that I have ever encountered' and 'as baleful as any to be found in the family law reports'. The wife was 36 years younger than the husband. At the date of the marriage, he was rich while her liabilities exceeded her assets. The marriage was never consummated. Over the 5-year marriage, she persuaded him to purchase a number of properties, most of which were vested in her sole name. In addition, she acquired shares, a racehorse, a Bentley and a boat. The husband was coerced into transferring a large house into the wife's name, and he was then forced to live as a virtual prisoner in part of the house while she occupied the larger part with her lover. He attempted suicide, and when he returned home he was again confined as a virtual prisoner, the wife removing his telephone and gate buzzer. He was eventually rescued by relatives. The judge found that the wife had exercised undue influence over the husband, that this was a short marriage, that the husband's contributions had been enormous while hers were negligible and that her marital and litigation conduct must be condemned in the strongest terms. Nevertheless, he awarded her a lump sum of £552,500. Both parties appealed.1 [1999] 2 FLR 498, CA.[1.180] The wife's appeal was dismissed and the husband's appeal allowed. The judge had fallen into manifest error in allowing the wife £552,500. He had failed to reflect his findings on the wife's misconduct in his award; it would be hard to conceive of a case of graver marital misconduct. This was a rare case in which litigation misconduct should be reflected in the substantive award. However, to leave the wife with nothing was impracticable since that would have required her to make substantial repayments to the husband, and the lump sum was reduced to £125,000.[1.181] For a case where the conduct of both parties was equally reprehensible and so cancelled each other out and had no effect on the award see the judgment of Mostyn J in FZ v SZ (Ancillary Relief: Conduct: Valuations)1.In R v B and Capita Trustees the husband was guilty of fraud in hiding two loans totalling £7m from the wife, never declaring income to HMRC, taking money to which he was not entitled, the pursuit of ruinous litigation and repeatedly lying to the court. His behaviour had brought financial catastrophe on the family. The judge found that this was conduct which he should take into account.1 [2010] EWHC 1630 (Fam), [2011] 1 FLR 64."
"MCA 1973, s 25(2)(d) directs the court to have regard, inter alia, to: 'the age of each party to the marriage and the duration of the marriage.' Quite simply, this means that, in short marriage cases, the wife will get less1. She has had less time to notch up a 'contribution' within MCA 1973, s 25(2)(f), or to become accustomed to a 'standard of living' which the court will perpetuate by reference to s 25(2)(c). Her 'needs' (s 25(2)(b)) can be secured by more modest provision, and so on. However, the presence of any children born during the marriage will have a beneficial impact on the wife's claims, both because the welfare of children is the first consideration under MCA 1973, s 25(1), and also because s 25(2)(f) gives pronounced emphasis to forward contributions by either party in looking after the children. Short marriages throw into sharper relief the duty of the court under MCA 1973, s 25A to consider implementing a clean break, or a programmed transition to independence. Be that as it may, there are cases, particularly with older people venturing into matrimony (albeit unsuccessfully) for the second or third time, where the emphasis must be on aftercare2.1. GW v RW (Financial Provision: Departure from Equality) [2003] EWHC 611 (Fam),
[2003] 2 FCR 289, [2003] 2 FLR 108, N Mostyn QC, at paras [36]–[44].
2. S v S [1977] Fam 127 at 134 per Ormrod LJ (house settled on ageing wife).
"…an improved methodology for assessing quantum in short marriage cases. Instead of focusing on contributions (and less helpfully, conduct), each of which can lead to erroneous thinking, the emphasis has now shifted to property; not in the sense of strict property rights, but of a broad demarcation line between marital and non-marital assets. Essentially, if an item of property is 'matrimonial', or the product of a business relationship between the couple, then the yardstick of equality applies, subject of course to discretionary departures; whereas if it is non-matrimonial, the asset belongs to the party who brought it to the marriage, unless there is some rationale for intervention:
'As already noted, in principle the entitlement of each party to a share of the matrimonial property is the same however long or short the marriage may have been.
The matter stands differently regarding property ("non-matrimonial property") the parties bring with them into the marriage or acquire by inheritance or gift during the marriage. Then the duration of the marriage is highly relevant …
In the case of a short marriage, fairness may well require that the claimant should not be entitled to a share of the other's non-matrimonial property. The source of the asset may be a good reason for departing from equality. This reflects the instinctive feeling that parties will generally have less call upon each other on the breakdown of a short marriage.'1
1.At paras [22]–[24] per Lord Nicholls. See also FS v JS [2006] EWHC 2793 (Fam), sub nom S v S (Non-Matrimonial Property: Conduct) [2007] 1 FLR 1496 Burton J at para [50], supporting the proposition in the text and rejecting a submission of Nicholas Mostyn QC to the contrary."
"It will rarely be appropriate to award substantive periodical payments (or maintenance pending suit1) to the young wife of a short, childless marriage, who can be expected to pursue her own career after the divorce2. There is, however, no rule of law to that effect: exceptions may be made for deserving cases, as, for example, where the wife has given up a career to marry, or is cut off from her cultural roots3. And it would seem that the mere existence of substantial assets in a liquid form can induce the court to frame a Duxbury award for the wife's benefit4.Where children have been born to the parties, either during the marriage or in a period of pre-marital cohabitation5, the position is different because the wife's earning capacity will necessarily be hampered by having to look after the family. While it may be right in such a case to fix a term of, say, five years on any periodical payments order, so as to ease the wife's transition to independence, it is not generally appropriate to add an MCA 1973, s 28(1A) bar on her extending the term, unless she consents6. Where the breakdown of the marriage and the presence of children results in a severe impairment of the wife's earning capacity, the burden is on a wealthy husband to show why there should be any term at all7. At the other end of the income scale, the protection afforded by the Child Support Agency may be a reason for limiting spousal maintenance to the short term8.
A husband cannot be presumed upon to support a teenage child of the wife's previous marriage, even if he is well off9; although it is no answer to a wife's claim for reasonable financial support to say that she has negligently allowed herself to become pregnant by another man10.
In the case of an older wife, some of the older authorities proceed on the basis of short-term maintenance followed by a clean break11; but these need reviewing in the light of Miller12. Before imposing a term, therefore (whether or not coupled with a s 28(1A) direction), it would seem that the court must at least rehearse all avenues issues of 'need' and 'compensation', and only implement a clean break if satisfied that the wife can progress to financial independence. Paradoxically, this can mean that for an older man, marrying a divorcee can be as expensive as marrying the first time round, even if the marriage is comparatively brief. Whether this is what Parliament intended when it enacted MCA 1973, s 25A13 is to be doubted14.
1. F v F(Maintenance Pending Suit) (1983) 4 FLR 382.
2. Graves v Graves (1973) Fam Law 124.
3. Soni v Soni [1984] FLR 294.
4. See Miller v Miller, above.
5. Day v Day [1988] 1 FCR 470, [1988] 1 FLR 278.
6. Waterman v Waterman [1989] 1 FCR 267, [1989] 1 FLR 380, CA (marriage lasting
17 months, one child); N v N (Consent Order: Variation) [1994] 2 FCR 275, [1993] 2 FLR 868, CA.7. C v C (Financial Relief: Short Marriage) [1997] 3 FCR 360, [1997] 2 FLR 26, CA. See
however Division B3, which critiques C v C and charts a more pronounced move in recent
authorities towards the clean break.
8. Mawson v Mawson [1994] 2 FLR 985, Thorpe J (three-year marriage; nine-month term;
no MCA 1973, s 28(1A) direction).
9. Leadbeater v Leadbeater [1985] FLR 789 (four-year marriage, which never really got off the
ground;no order for W's 17-year-old daughter claiming social security; per Balcombe J: in
marriage of this length, responsibility lay with girl's father).
10. Fisher v Fisher [1989] 1 FCR 309, [1989] 1 FLR 423, CA.
11. See eg Hedges v Hedges [1990] 1 FCR 952, [1991] 1 FLR 196, CA (18-month term for
school housemaster's wife aged 37); Robertson v Robertson (1983) 4 FLR 387 (similar term
for wife of short marriage who had never worked due to back injury; age not stated);
P v P (Financial Relief: Non-Disclosure) [1994] 1 FCR 293, [1994] 2 FLR 381, Thorpe J
(two-year term for 51-year-old wife of long marriage who had some earning capacity as a teacher).
12 Cf however M-D v D [2008] EWHC 1929 (Fam), [2009] 1 FCR 731, [2009] 1 FLR 810,
Sir Mark Potter P (five-year marriage between aspiring barrister and ageing circuit judge;
tapered periodical payments of £20,000 year 1, £15,000 year 2, and £10,000 year 3;
thereafter clean break; small lump sum to supplement pension arrangements).
13 By MFPA 1984.
14 Cf Quan v Bray [2018] EWHC 3558 (Fam), [2019] 1 FCR 1014, per Mostyn J at [48]:
'These provisions have been strangely neglected since they were enacted, but recent decisions
have emphasised their key importance.'
"D Effect on Lump Sum and Property Claims1 Equal division of 'matrimonial property'
Where a young couple pool their efforts to acquire a joint home or to run a business, then subject to issues of prior housing need, the assets are in principle divisible equally. This is because, as a rule, all jointly acquired wealth is 'matrimonial property' and should be divided accordingly. This, however, does not solve the problem of what the court should do, if anything, where an asset is brought into the marriage by one party but grows in value during the short marriage1. The trend of first instance decisions is away from treating such 'passive economic growth' as falling into the matrimonial pot2. The position may be different, however, if the accretion in value came from an unexpected windfall, or was contributed to by the other spouse3.
It is strongly arguable post-Miller that the matrimonial home, even if acquired prior to the marriage during a period of cohabitation, and other 'family assets' in the traditional sense (holiday homes, caravans, furniture, insurance policies and other family savings)4 are divisible equally regardless of the duration of the marriage5. If so, English law has aligned itself with Scottish law up to a point6, which may indeed have been the intention of the Judicial Committee. However, this approach would not be apt in the case of a second marriage where one or other party brings to the table their interest in the matrimonial home of a former marriage7.
1. See Miller v Miller [2006] UKHL 24, [2006] 2 FCR 213, [2006] 1 FLR 1186, at [71] per Lord Nicholls, and at [167]–[168] per Lord Mance, which demonstrate some difference of approach. In principle, Lord Mance would have put to one side the growth in value of the husband's New Star business during the marriage, whereas Lord Nicholls treated it as matrimonial property, albeit subject to some departure from equality. Lady Hale falls somewhere in between.
2. Rossi v Rossi [2006] EWHC 1482 (Fam), [2006] 3 FCR 271, [2007] 1 FLR 790; Fallon v Fallon [2008] EWCA Civ 1653, [2010] 1 FLR 910, CA (four-year marriage, two children; parties lived in council property, in which H was accruing the right to buy; on separation, W and children were rehoused by local authority; thereafter H exercised his right to buy and sold at a profit; not treated as a matrimonial asset.
3. See eg FS v JS [2006] EWHC 2793 (Fam), [2007] 1 FLR 1496, Burton J (unexpected sale of H's partnership share, thought to be valueless on previous divorce, for £1.2m; 'matrimonial property' and so in principle divisible equally despite shortish marriage of 7.5 years), sed quaere: in S v AG (Financial Orders: Lottery Prize) [2011] EWHC 2637 (Fam), [2011] 3 FCR 523, [2012] 1 FLR 651, Mostyn J treated a lottery ticket, not purchased from joint funds, as W's separate property, notwithstanding the long marriage.
4. [2006] UKHL 24, [2006] 2 FCR 213, [2006] 1 FLR 1186, at [149] per Baroness Hale.
5. A submission to this effect was accepted by Burton J in FS v JS [2006] EWHC 2793 (Fam), [2007] 1 FLR 1496. Cf however Fallon v Fallon [2008] EWCA Civ 1653, [2010] 1 FLR 910, CA (no entitlement to share in 'right to buy' exercised after separation, even though right was accruing during the marriage); and NA v MA [2006] EWHC 2900 (Fam), [2007] 1 FLR 1760, at [175], where Baron J took Lord Nicholls to mean, not that the matrimonial home should be divided equally, but that its value and the lifestyle it produced were relevant s 25 factors. (In the event however she awarded W £4.5m as a housing fund, as against the £8m matrimonial home.)
6. See Family Law (Scotland) Act 1985, as explained in Lord Hope's speech.
7 Cf Kowalczuk v Kowalczuk [1973] 1 WLR 930, where Lord Denning MR espoused this distinction. Lord Denning, of course, is something of a posthumous authority in these things.
2 Discounting from equality
The early demise of a marriage can be a reason for departing substantially from equality1. This is because, the shorter the marriage, the more the court has regard to the source of wealth, whether it be capital introduced by one party, or a proven earning capacity that pre-dated the relationship. Thus in 'big money' cases, for example, it is not uncommon for the courts to discount the wife's award to 40% or less, even in a marriage that has lasted as long as 12 years and produced children2. And in one small asset case, the wife walked away with an award of only 16% (£40,000), on the ground that despite having two children, she was securely housed and her only need for money was to pay down debts3. As in many areas of matrimonial finance, no single formula can be devised to produce the perfect result: the outcome depends on the facts of the individual case and must be looked at broadly4.
1. See [4] above.
2. GW v RW (Financial Provision: Departure from Equality) [2003] EWHC 611 (Fam), [2003] 2 FCR 289, [2003] 2 FLR 108, N Mostyn QC; FS v JS [2006] EWHC 2793 (Fam), [2007] 1 FLR 1496, Burton J (7.5-year marriage, two children; 40% of matrimonial assets to W; H to keep all non-marital property). Cf Miller [2006] UKHL 24, [2006] 2 FCR 213, [2006] 1 FLR 1186 (marriage of two years and nine months; one-sixth to wife).
3. Fallon v Fallon [2008] EWCA Civ 1653, [2010] 1 FLR 910, CA. Cf however M-D v D [2008] EWHC 1929 (Fam), [2009] 1 FCR 731, [2009] 1 FLR 810, Sir Mark Potter P (five-year marriage between circuit judge and former probation officer turned barrister; each securely housed; lump sum of £50,000 to W, bringing her up to 41% of the joint assets, in order to 'kick start' her pension.
4. Miller, per Baroness Hale at para [152]; per Lord Nicholls at para [27]. For authoritative discussion of relevant principles, see insightful judgment of McFarlane LJ in Sharp v Sharp [2017] EWCA Civ 408, [2017] 2 FCR 766, [2017] 2 FLR 1095."
Discussion
Conclusion
Note 1 Although authority on the point was not cited, I note that in Behzadi v Behzadi [2008] EWCA Civ 1070 at para.7.1, Wilson LJ stated:‘…in the absence of evidence to the contrary, they should be taken at the percentage nowadays conventionally taken in respect of the sale of real property in England and Wales, namely 3%.’
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