Financial relief for married couples - including injunctions

Financial orders

Under s23 of the Matrimonial Causes Act 1973 spouses have financial claims against each other for:

• Lump sums
• Property adjustment
• Periodical payments - maintenance
• Pension sharing

The Courts in England and Wales have a very wide discretion to redistribute all the assets of the parties, taking into consideration “all the circumstances of the case”. When deciding how to exercise its discretion the Court is required to take into account certain factors set out in s25 Matrimonial Causes Act 1973 which are the welfare of the children, the parties’ financial resources, their financial needs, their standard of living, their ages and the duration of the marriage, any physical or mental disability of either party, the contributions made by each party to the welfare of the family and, in exceptional circumstances, their conduct.  These factors include whether there is a prenuptial agreement made in this jurisdiction or another.  Finally the court must give particular consideration to whether it is possible to achieve a clean break settlement, which is a final settlement involving no on-going payments.

The statute contains little guidance as to what weight judges should apply to these different factors, recent case law has, however, provided more guidance as to how the Courts will deal with these cases:

Starting point

White v White [1] – set out two important guiding principles: (1) that the financial and the domestic contribution must be treated as being equal, and (2) the concepts of fairness and the "yardstick of equality" which mean that the Courts should not depart from equality unless there is a good reason to do so. It is, however, important to note that fairness does not always mean an equal division of the marital property and certain assets may be treated differently if there is a surplus after the parties’ needs have been met.

Reasons for departing from equality  

• "stellar contribution" as dealt with in Sorrell[2] (60:40 division in favour of husband) and Charman [3] (63:37 division in favour of husband).  This is difficult to argue because it requires a "spark or force or seed of genius…" often resulting in the creation of exceptional wealth. It was confirmed in Miller[4] and McFarlane [5] that a special contribution could be taken into account if it was so marked that it would be inequitable to disregard it.
  
  
• Preacquired or inherited wealth (although this is less likely to be relevant the longer the marriage as assets will have merged into marital assets) or where one party had a fully fledged earning capacity before the marriage.

Miller/McFarlane

• These two cases confirmed the principles set out in White and offered some new guidance, based on three new principles (1) satisfying needs (generously interpreted) generated by the relationship between the parties; (2) compensating for relationship generated economic disadvantage; (3) sharing the fruits of the marriage. The court should consider all three, being careful to avoid double counting. The ultimate objective is to give each party an equal start on the road to independent living.
  
  
• Providing for the needs of both parties, set at a level as close as possible to the standard of living enjoyed during the marriage, has been a long-standing goal of the courts. Although in most cases this tends to consume all the assets, there will be cases which involve a surplus, sometimes substantial, available for distribution between the parties after needs have been provided for.
  
  
• Although needs is a reasonably well understood concept, those of compensation and sharing have proved more difficult to apply in practice and this has made it more difficult to predict with any confidence the range within which such an award is likely to fall. There are also the issues of post-separation assets and future income and their treatment within any financial division, which require careful consideration. It is therefore essential to seek specialist advice as early as possible to see whether these issues could affect you.

Periodical payments  

• Although the Court is under a duty to consider whether it is appropriate to make a clean break settlement, where it is not possible due to an insufficient level of assets, then periodical payments may be ordered. The Court then needs to consider whether to put a term (either extendable or not) on the payments or to make the order for joint lives (or until remarriage or further order of the Court).

Last but not least - conduct

• Miller makes it clear that conduct cannot be used to increase an award to the other spouse unless that conduct is exceptional such that it would be inequitable to disregard it (e.g. attempted murder or fraud/financial misrepresentation).

In every case the Court will need to weigh the factors and try and balance the parties' competing claims, while aiming for a fair outcome. Although it is therefore difficult to predict the exact outcome of a case, especially at an early stage, we will be able to identify a range of possible outcomes and to suggest a bracket within which the final award would fall.

Variation/set aside of orders

• Certain financial orders can be varied in the event that one of the parties has a change in circumstances. This provision is most often used for maintenance orders and orders for payments of lump sums by instalments.  This issue was dealt with in the recent of Myerson.[6]
  
  
• Maintenance variations can be upwards or downwards or discharge the order completely.
  
  
• Financial orders can be set aside in limited circumstances (these are further limited if the order was made by consent). The usual circumstances would be: non-disclosure of an essential matter, fraud/misrepresentation, supervening events which invalidate the whole basis of the order (Barder[7]) or undue influence (more relevant with consent orders). There is a high burden of proof to succeed with such an application, for example under Barder there are 4 conditions set out and all of these must be met in order to succeed, they are:

i) that new events have occurred since the making of the order which invalidate the basis or fundamental assumption on which the order was made so if leave to appeal out of time was given the appeal would be certain or very likely to succeed

ii) that the new events have occurred within relatively short period of order being made, generally no more than a few months     

iii) that the application has been made reasonably promptly in circumstances of case; and         

iv) that the grant of leave to appeal should not prejudice third parties who have acquired in good faith and for valuable consideration interests in property, which is the subject matter of the order

• Circumstances often change after an order is made and the Courts will not set aside an order just because the circumstances are different from what they seemed at the time of the order. We can, however, advise you about the best way of proceeding in the event that you find yourself in this situation.

Enforcement

• There are a number of ways of enforcing financial orders in the event that the other party fails or chooses not to comply. These include methods of enforcing orders against assets in reciprocal jurisdictions, although there are certain jurisdictions that will not enforce English orders and therefore if any of these jurisdictions are involved in your case we will discuss other options with you as early on in the case as possible to avoid these problems, if at all possible, on enforcement.  This was an issue referred to in the case of Charman.
  
  
• In addition to enforcement of orders there are also remedies that can be used during the proceedings in the event that one party is not cooperating with the process. If necessary a freezing injunction can be obtained which can not only freeze assets within the jurisdiction but also worldwide. A search order could also be obtained in cases of non-disclosure. This is a complicated and specialist area and therefore if you think it may be applicable to your case we need to be aware of this at the outset as action will need to be taken quickly and often without notice to the other party.

Data Protection

• In recent years the rules relating to data protection have become far more wide reaching encompassing electronic communications as well. It is important, given that you may be dealing with documents belonging to another that you are fully aware of the provisions of all the relevant statutes to avoid unwittingly putting yourself at risk of committing a criminal offence.  Similarly, if your rights have been infringed and there has been an unauthorised access to your private documents and information, we may need to obtain an injunction for you for the delivery up of all information and documentation wrongly accessed/taken.

In the event that you have queries about civil partnership please refer to the separate article on our website.

Forsters Family Group 2009

[1] White [2001] AC596; [2000] 3WLR1571

[2] Sorrell [2005] EWHC 1717(Fam); [2006] 1 F.L.R. 497

[3] Charman [2007] EWCA Civ 503; [2007] 1 F.L.R. 1246

[4] Miller [2006] UKHL 24 SESSION 2005-06

[5] McFarlane [2004] EWCA Civ 872; [2005] Fam. 171

[6] Myerson [2009] EWCA Civ 1376; [2009] 2 F.L.R. 147

[7] Barder [1988] A.C. 20; [1987] 2 W.L.R. 1350