Family: L4 – Finance and Property on Divorce (part 1)
Disputes over distribution of martial assets upon relationship breakdown
- Complicated area of law
- A mixture of legislation with case law
Financial/Property Orders on Divorce:
Legislation: Matrimonial Causes Act 1973, Part II, ss. 21 – 40B
Wide judicial discretion in redistributing matrimonial assets
- Decisions based on the unique facts of the case
- Piglowska v Piglowski [1999] 2 FLR 763
- No rigid application of guidelines from previous cases
Fairness: the overriding purpose
- White v White [2000] 2 FLR 976
Discretion-based systems:
- flexibility but unpredictability – provides fairness from the flexibility, but you
can’t guess the likely outcome.
Orders that can be granted under the Matrimonial Causes Act 1973:
Order for maintenance pending suit: s 22 MCA 1973
- On a petition for divorce, nullity of marriage or judicial separation, the court
may make an order requiring either party to the marriage to make to the
other such periodical payments for his/ her maintenance and for such term,
ending with the date of the determination of the suit, as the court thinks
reasonable.
- Quantifying interim maintance?
o Judicial discretion – “reasonable” provision
o A v A (Maintenance Pending Suit: Provision of Legal Fees) [2001] 1 FLR
377: Not just daily living expenses - May include sum to cover costs of the
proceedings
o M v M (Maintenance Pending Suit) [2002] EWHC 317 (Fam): Substantial
order can be made. (wife received £330.000 per annum maintenance)
Financial Provision Orders:
1. Periodical Payments: s.23 (1)
- An order that either party to the marriage shall make to the other such periodical
payments, for such term, as specified by the court
- Orders can be made not only in favour of a spouse, but also to/ for the benefit of
a child of the family
- s.23 (1) d, e, f MCA
- Child can be:
o aged under 18
o over 18 but - undergoing education/ training or special circumstances
(disability)
- Periodical payments in favour of a spouse terminate on his/ her remarriage
o s.28(1) (a) MCA 1973
o Periodical payments cannot extend beyond the remarriage of/ formation of a
civil partnership by the party in whose favour the order is made
- What if the partner starts cohabiting?
, o Cohabiting is not the same as marriage – doesn’t provide security like
marriage does.
o Periodical payments do not automatically terminate on cohabitation
o Payer can apply to the court to have the payment reduced or extinguished
o Atkinson v Atkinson [1988] Ch 93: Settled (long-term) cohabitation cannot
be equated with marriage - Court would have to make qualitative judgement
about what settled cohabitation is
o In recent years, cohabitation has increased – has the law changed? Fleming v
Fleming [2003] EWCA Civ 1841 - Atkinson applies notwithstanding social
changes re cohabitation
2. Lump Sum Order (Capital Order): s.23 (1)
- can be ordered to be paid in instalments s23(3)(c)
- can incur interest s23(6)
- A lump sum order in favour of a spouse is a final order (cannot be varied
subsequently)
- BUT A lump sum order in favour of a child is not final
o s. 23(4) MCA 1973 – The power of the court ... to make an order in favour of
a child of the family shall be exercisable from time to time
Property Adjustment Orders:
a. Transfer of property order:
- s. 24(1)(a) - a spouse may be ordered to transfer property to the other spouse/
any child of the family
- A spouse may be ordered to transfer a share in the matrimonial home
- Other property may also be transferred (eg. car)
- A spouse may be ordered to transfer the home with the other spouse agreeing to
forgo claims for maintenance
- A spouse may be ordered to transfer investments so that the other can live on the
income
b. Settlement of property order:
- s. 24(1)(b) - settlement of property to which a spouse is entitled can be ordered
for the benefit of the other spouse/ children
- give children a roof during their dependency, but enable the house to be
transferred back to the owner
c. Order for the sale of property:
- s. 24 A(1) MCA
- If a financial or property adjustment order has been made, the court may order
the sale of property in the proceeds of sale of which either/ both spouses
has/have a beneficial interest
- Enforcement mechanism in case of non-compliance = proceeds of sale are paid
to the spouse who was entitled to a payment.
Pension sharing orders: s 24 B MCA 1973
1. Offsetting - Compensate for the loss of pension by making transfer of property
orders or ordering a larger lump sum to be paid
2. Pension attachment - Once the pension becomes payable, a part of the pension
income must be made available to the other party
3. Pension sharing - Part of the pension fund can be allocated to the other spouse
Sch 5 Civil Partnership Act 2004:
Same orders available for civil partnerships
Disputes over distribution of martial assets upon relationship breakdown
- Complicated area of law
- A mixture of legislation with case law
Financial/Property Orders on Divorce:
Legislation: Matrimonial Causes Act 1973, Part II, ss. 21 – 40B
Wide judicial discretion in redistributing matrimonial assets
- Decisions based on the unique facts of the case
- Piglowska v Piglowski [1999] 2 FLR 763
- No rigid application of guidelines from previous cases
Fairness: the overriding purpose
- White v White [2000] 2 FLR 976
Discretion-based systems:
- flexibility but unpredictability – provides fairness from the flexibility, but you
can’t guess the likely outcome.
Orders that can be granted under the Matrimonial Causes Act 1973:
Order for maintenance pending suit: s 22 MCA 1973
- On a petition for divorce, nullity of marriage or judicial separation, the court
may make an order requiring either party to the marriage to make to the
other such periodical payments for his/ her maintenance and for such term,
ending with the date of the determination of the suit, as the court thinks
reasonable.
- Quantifying interim maintance?
o Judicial discretion – “reasonable” provision
o A v A (Maintenance Pending Suit: Provision of Legal Fees) [2001] 1 FLR
377: Not just daily living expenses - May include sum to cover costs of the
proceedings
o M v M (Maintenance Pending Suit) [2002] EWHC 317 (Fam): Substantial
order can be made. (wife received £330.000 per annum maintenance)
Financial Provision Orders:
1. Periodical Payments: s.23 (1)
- An order that either party to the marriage shall make to the other such periodical
payments, for such term, as specified by the court
- Orders can be made not only in favour of a spouse, but also to/ for the benefit of
a child of the family
- s.23 (1) d, e, f MCA
- Child can be:
o aged under 18
o over 18 but - undergoing education/ training or special circumstances
(disability)
- Periodical payments in favour of a spouse terminate on his/ her remarriage
o s.28(1) (a) MCA 1973
o Periodical payments cannot extend beyond the remarriage of/ formation of a
civil partnership by the party in whose favour the order is made
- What if the partner starts cohabiting?
, o Cohabiting is not the same as marriage – doesn’t provide security like
marriage does.
o Periodical payments do not automatically terminate on cohabitation
o Payer can apply to the court to have the payment reduced or extinguished
o Atkinson v Atkinson [1988] Ch 93: Settled (long-term) cohabitation cannot
be equated with marriage - Court would have to make qualitative judgement
about what settled cohabitation is
o In recent years, cohabitation has increased – has the law changed? Fleming v
Fleming [2003] EWCA Civ 1841 - Atkinson applies notwithstanding social
changes re cohabitation
2. Lump Sum Order (Capital Order): s.23 (1)
- can be ordered to be paid in instalments s23(3)(c)
- can incur interest s23(6)
- A lump sum order in favour of a spouse is a final order (cannot be varied
subsequently)
- BUT A lump sum order in favour of a child is not final
o s. 23(4) MCA 1973 – The power of the court ... to make an order in favour of
a child of the family shall be exercisable from time to time
Property Adjustment Orders:
a. Transfer of property order:
- s. 24(1)(a) - a spouse may be ordered to transfer property to the other spouse/
any child of the family
- A spouse may be ordered to transfer a share in the matrimonial home
- Other property may also be transferred (eg. car)
- A spouse may be ordered to transfer the home with the other spouse agreeing to
forgo claims for maintenance
- A spouse may be ordered to transfer investments so that the other can live on the
income
b. Settlement of property order:
- s. 24(1)(b) - settlement of property to which a spouse is entitled can be ordered
for the benefit of the other spouse/ children
- give children a roof during their dependency, but enable the house to be
transferred back to the owner
c. Order for the sale of property:
- s. 24 A(1) MCA
- If a financial or property adjustment order has been made, the court may order
the sale of property in the proceeds of sale of which either/ both spouses
has/have a beneficial interest
- Enforcement mechanism in case of non-compliance = proceeds of sale are paid
to the spouse who was entitled to a payment.
Pension sharing orders: s 24 B MCA 1973
1. Offsetting - Compensate for the loss of pension by making transfer of property
orders or ordering a larger lump sum to be paid
2. Pension attachment - Once the pension becomes payable, a part of the pension
income must be made available to the other party
3. Pension sharing - Part of the pension fund can be allocated to the other spouse
Sch 5 Civil Partnership Act 2004:
Same orders available for civil partnerships
