'In this world nothing can be said to be certain, except death and taxes.' -- Benjamin Franklin, November 1817

'Death, taxes and childbirth! There's never any convenient time for any of them.' -- Margaret Mitchell, Gone with the Wind, 1936

Introduction

The death of a party in the context of divorce and financial remedies can have incredibly serious consequences for clients.

It is therefore imperative, in my view, for family lawyers to have a firm grasp of the issues which may arise, and to be aware of the pitfalls which could quite easily trap the unwary.

The case of Hasan v Ul-Hasan & Anor [2021] EWHC 1791 (Fam), a decision of Mostyn J, has certainly renewed discussions in this area. Sadly, the pandemic has also brought this topic to the fore for many practitioners, who have had to grapple with seriously unwell and sometimes incapacitous clients and, in one or two cases, the death of a client.

The basics

This blog piece is by no means a comprehensive guide. It aims to set out some basics, and to provide a steer to those unfamiliar with this area. The following are essential pointers:

• Spouses remain married until decree absolute. If one party dies at any time until the pronouncement, the parties remain spouses at date of death.
• For inheritance purposes the marriage still exists, and no further step in the divorce proceedings can be taken (see Purse v Purse [1981] Fam. 143).
• If either party dies before an application for a financial remedy is made under the Matrimonial Causes Act 1973 or the Civil Partnership Act 2004, the court will no longer have jurisdiction under those Acts (see McMinn v McMinn (Ancillary Relief: Death of Party to Proceedings) [2002] EWHC 1194 (Fam)).

If an application has been made but the proceedings have yet to be determined, the application will abate: Sugden v Sugden [1957] P 120, in which Denning LJ had determined that claims for ancillary relief (as it then was) were not 'causes of action' under section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934, which could subsist post-death.

The surviving spouse would therefore have to consider an application against the estate under the Inheritance (Provision for Family and Dependants) Act 1975, provided the deceased had died domiciled in England & Wales.

Sugden has been followed in later decisions. However, it has come under renewed scrutiny in Hasan v Ul-Hasan (deceased) & Anor [2021] EWHC 1791 (Fam) (more below).

Of course, the death of a party could also amount to a Barder event, paving the way for the surviving party to apply to set aside the order: Barder v Barder (Calouri Intervening) [1988] AC 20; see also Smith v Smith [1991] 2 FLR 432; Reid v Reid [2004] 1 FLR 736; WA v Executors of the estate of HA & Ors [2015] EWHC 2233 (Fam).

The consequences of death on financial remedy orders

What happens if a spouse dies after the order has been made? The answer depends on which spouse has died, what sort of order has been made, and whether decree absolute has been pronounced.

Financial provision, property adjustment and pension sharing orders are not effective, and not capable of being enforced, if the decree absolute has not been granted: ss 23(5), 24(3) and 24B(2) of the Matrimonial Causes Act 1973.

The point was considered in McMinn v McMinn [2002] EWHC 1194 (Fam). Following a hearing, the district judge had handed down judgment ordering the husband to transfer £80,000 to the wife. Before the draft order could be prepared and before any application for a decree absolute could be made, the husband stabbed the wife to death. The wife’s executors sought to enforce the order against the husband, who would otherwise benefit from his act.

The court had great sympathy for the executors, but ultimately held that the claim could not succeed given the plain terms of s 23(5) of the MCA 1973, which provided that no order made on or after the grant of a decree of divorce could take effect unless the decree had been made absolute.

What about periodical payments? Both secured and unsecured periodical payments will cease on the death of the receiving party. However, secured periodical payments will not be affected by the death of the paying party, whereas unsecured periodical payments will cease.

Any arrears of unsecured periodical payments can still be enforced against an estate if the paying party dies. This was established in Sugden (referred to above), in which Denning LJ determined that arrears of maintenance could be recovered on the payer’s death, but not so in respect of future payments.

As for lump sum and property adjustment orders, provided the decree has been made absolute, those orders survive the death of either party and can be enforced.

A pension sharing order only comes into effect on the later of 28 days following the date of the pension sharing order or the date of decree absolute, whichever is later. Further, no pension sharing order shall take effect earlier than 7 days after the end of the period for filing a notice of appeal against the order.

Implementation (which is distinct from the order taking effect) takes place in accordance with s 34(1) of the Welfare Reform and Pensions Act 1999. Implementation must take place within a four month period beginning on the later of (a) the date the order takes effect (otherwise known as 'transfer day'); or (b) the date the pension scheme trustee or provider receives the relevant pension sharing information.

If the person sharing their pension dies before the order has taken effect, the pension share will fail and be unenforceable against the pension scheme.

If the person sharing their pension dies after a pension sharing order has taken effect but before its implementation, the pension share will still be effective. The receiver will acquire a right to the pension share and implementation should go ahead.

As can be gleaned above, the unexpected death of the transferor of a pension sharing order and a poorly timed decree absolute may therefore give rise to very serious consequences. For example, if decree absolute has been obtained but the transferor dies before the pension sharing order has taken effect, the transferee would not only have lost their share of the transferor’s pension but as an ex-spouse, would be unlikely to have any entitlement to a spouse’s or dependant’s pension, depending on the scheme rules.

Note that pension attachment orders, unlike pension sharing orders, are treated the same way as unsecured periodical payments and lump sum orders on death. In respect of pension attachment orders in the form of periodical payments, those will cease on the death of either party. A pension lump sum pursuant to a pension attachment order will survive death and remain enforceable.

Hasan v Ul-Hasan [2021] EWHC 1791 (Fam)

This was a decision of Mostyn J, handed down in July 2021. The parties married in Pakistan in 1981. They separated in 2006, and the husband obtained a divorce in Pakistan in 2012. The wife claimed that during the course of their long marriage, very significant wealth had been accumulated.

In 2017, the wife was given leave to bring proceedings under Part III of the MFPA 1984. Several interlocutory hearings took place, principally about the husband’s disclosure. However, in January 2021, before the wife’s substantive application could be decided, the husband died at the age of 81. The wife was aged 74.

The key question before the court was whether the un-adjudicated claim by the wife under Part III survived the death of the husband and could be continued against his estate.

The wife contended that the authorities under Part II of the MCA 1973 and I(PFD)A 1975, which state that financial claims shall expire with the death of the respondent, did not bind the court because they did not relate to Part III claims. The question had never before been considered under Part III; it was, she contended, a 'blank canvas'.

Mostyn J disagreed and held that the Part II jurisprudence was clearly applicable to the Part III application. His Lordship observed that section 17 of the 1984 Act imports all the powers under ss 23 and 24 of the 1973 Act. Section 18(3) of the 1984 Act also required the court to exercise those powers in accordance with the terms of s 25 of the 1973 Act.

The Part II jurisprudence unambiguously states that a financial claim made during marriage or following divorce expires with the death of the respondent. The principle applies equally whether the claim proceeds under Part II following a domestic divorce, or under Part III following an overseas divorce.

Mostyn J accepted that the decision in Sugden was binding on him. However, that did not mean that he had to agree with it ([24]):

‘Indeed, with the greatest possible respect to Denning LJ, I disagree with it, for three reasons on which I will expand below. The reasons are: i) A fair textual interpretation of s 1 of the 1934 Act leads to the conclusion that post-divorce ancillary relief is recognised as a cause of action and is not excluded from the scope of the section; ii) The nature of the claim, especially where it is framed as a sharing claim, is not a mere spes that discretion will be exercised in the claimant's favour. It is (or may be) a valuable claim, with objective solidity which is in many ways less speculative than a personal injury claim or a claim for an injunction; and iii) Post-death relief has been awarded following the set-aside of an financial remedy order at the suit of the payer where the payee has died shortly after the making of the order. In this scenario it will be seen that the court, without any inhibition, exercises the statutory discretion under s 25 of the Matrimonial Causes Act 1973. This can only be explained if the right to apply to set aside the order and to seek a full rehearing is a cause of action within the scope of s 1 of the 1934 Act.’

Section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934 continues a deceased party’s 'causes of action' existing at the time of death for the benefit of their estate, as well as causes of action against them.

As stated above, in Sugden, Denning LJ had held that claims for ancillary relief were not “causes of action” that could subsist post-death, unless an effective order had already been made. This had been followed in subsequent authorities.

Mostyn J disagreed. Having analysed s 1 of the 1934 Act, his Lordship stated that (at [40]):

‘It is therefore clear to me that Parliament must have regarded a claim for post-divorce ancillary relief as a cause of action for the purposes of s 1 of the 1934 Act. Once that has been accepted it can be seen that Parliament specifically decided not to include a claim for post-divorce relief in the list of excluded causes of action.’

The 1934 Act does not define 'cause of action', but the court observed that it includes processes which are speculative, personal and discretionary. In short, if there is a right which gives rise to a remedy from the court, then there is a cause of action: Letang v Cooper [1965] 1QB 232; Mercedes-Benz AG v Leiduck [1996] AC 284.

It was therefore very difficult to see why a claim for post-divorce relief did not amount to a cause of action. His Lordship observed that (at [45], [48]):

‘It is a right, at the very minimum, to apply to the court, which will award a remedy if the necessary facts are proved... I struggle to understand why a claim for damages following personal injury or a claim for an injunction are causes of action when a sharing claim earned over many years and which might be quantified in tens of millions of pounds is not.’

Mostyn J also highlighted the contrasting approaches to cases where the courts had determined that applications for financial remedies could only be made and pursued during the parties’ joint lives, and those where relief had been awarded following the set-aside of a financial remedy order where one party had died, shortly after the making of the order (Barder appeals).

Where a party had died shortly after the making of the order, the courts not only have the power to set aside the order, but may also go on to vary the order, exercising its discretion under s 25 of the MCA.

When the appeal court exercises its discretion in place of that previously exercised, what discretionary power is it wielding? In Mostyn J’s view, there could only really be one answer ([58]):

'If the appeal court does more than merely set aside the disposition of the trial judge and makes an alternative disposition, then it must be applying the powers in ss 23 and 24 of the Matrimonial Causes Act 1973, those being the powers of the lower court. When exercising its discretion as to how those powers should be applied in place of the trial judge it can only be doing so under s 25 of the Matrimonial Causes Act 1973. There are no other available powers and there is no other available source of discretion.'

In Mostyn J’s view, this clash on the authorities, between those cases where death has occurred shortly before trial, and those where death has occurred shortly after trial, is 'illogical, arbitrary and capable of meting out great injustice'.

Where next?

The Court of Appeal decision in Sugden remains binding authority. However, because Mostyn J considers Sugden to be wrong, and the issue gives rise to a point of law of general public importance which had been fully considered in his judgment, Mostyn J has allowed a leapfrog appeal to the Supreme Court, should either party apply.

I have it on good authority that an application for permission to appeal has indeed been lodged with the Supreme Court. Further developments are therefore on the horizon. Watch this space!

Jennifer Lee
Pump Court Chambers
3 Pump Court, Temple EC4Y
27 February 2022

This blog is based on a Class Legal webinar of the same title given by the author and Ms Carina Smith, Partner at RadcliffesLeBrasseur LLP, first broadcast on 27 January 2022. A recording of the webinar is available here.