Is Marital Property Equitably Divided - Essay Example

?Marital Property – Equitably Divided? Introduction The current law in the UK gives non-working spouses, who are unable to financially contribute to the marital home, reasonable and equitable division of property. This is important – non-working spouses, particularly those who care for children, arguably contribute just as much, if not more, to the marital unit. They should be compensated accordingly. Moreover, the children, who often reside with the mother, also need some kind of financial stability. This may only be provided when the mother is awarded sufficient property. However, the law has not evolved accordingly when couples are only living together.1 The law still does not recognize partners who do not contribute direct financial contributions to the household or home.2 Some of the cases do recognize some kind of financial contribution – such as contributions made towards household bills.3 However, there has not been a cohabitation case that states that conduct alone, meaning non-financial conduct alone – is sufficient to award a partner an equitable portion of the property.4 This essay will examine these inequities. Marital and Cohabitation Law – Before White v. White White v. White5 was a case that focused upon married persons. In this case, the court decided that financial need was not a basis for the distribution of finances. Moreover, the case was the first to establish that the distribution of property upon divorce should be divided up equitably, without discrimination. That way, the wage earner would not be entitled to more than the child-carer. In other words, the non-financial contribution of the parent who cares for the children is recognized in property division. The White case represented a landmark, in that the court was ordered to divide marital property equitably, regardless if one contributed financially towards to home or not. Before White, the cases in the UK were decided against the non-working spouse who did not contribute financially towards the house, either towards the purchase price or towards the mortgage. For instance, in the case of Pettit v. Pettit,6 the couple was married and the husband did not work outside the home. Therefore, he did not contribute financially. Moreover, the home was in the separate name of the wife, and the wife used her own funds to buy the home. The husband contributed labour towards the home – decorating the home, building a wardrobe, laying a lawn and constructing an ornamental wall and garden side wall. However, the Pettit court found that the husband was not entitled to a beneficial interest in the home. Therefore, prior to White, the court presumptively did not award property to the non-working spouse. White represents an improvement upon this, as discrimination against the non-working spouse is not longer acceptable. That said, there is not a statutory provision that dictates that property needs to be divided equitably, although the Matrimonial Causes Act 1973 states that, essentially, courts have discretion in that there is no determined order of priority in the distribution of assets in every case. Although the marital property law has evolved to give equal rights to the non-working spouse, the law regarding co-habitating couples has not similarly evolved. Prior to the White case, the courts decided a number of co-habitation cases against the non-working spouse. For instance, in Gissing v. Gissing,7 the non-working spouse was the man, and the man did not contribute financially towards the home. The husband did buy furniture and also did chores, such as lawn-mowing. The husband did not have an interest in the home. This was the same case with Lloyds Bank v. Rosset.8 In that case, it was the wife that did not work. She claimed a beneficial interest in the property when the Lloyd's Bank tried to foreclose on the home after the husband took a loan against the home and defaulted. The Lloyd's court found that the only way for the woman to have an interest in the home is if the parties agreed that she would have interest, or if there was conduct on behalf of the wife that showed that she had interest. In this case, the court only looked at financial conduct – did the woman contribute financially towards the house? Burns v. Burns9 is another co-habitation case that was also prior to the White case. In this case, the non-working spouse did not contribute directly towards the purchase price or towards the mortgage, but she did contribute financially by paying household bills and paying money towards redecoration. She was with the plaintiff for 19 years without getting married. The court, again, found that the Valerie Burns did not have a beneficial interest in the home. Another case that was before White, but focused upon cohabitation instead of marriage is Drake v. Whipp.10 Drake v. Whipp is different from the other cohabitation cases, however, because, in Drake, the woman actually did contribute financially towards the house – she financially contributed around 20% of the house's purchase price. In this case, as in the others, the woman claimed a beneficial interest in the property. Unlike the other cases, the woman had actually contributed financially towards the house. The court increased her share in the house from 20% to 33%, because she was able to show that she contributed labour and housekeeping, and helped to pay the household expenses. Therefore, in the pre-White cases, both marital and non-marital, the courts found, by and large, that the non-working partner or spouse, who does not contribute financially towards the home, is not entitled to an equitable interest. An equitable interest is an interest that the court decides is fair. The interest is not guaranteed by the law, but by the policy of fairness.11 And, prior to White, the court was patently unfair to the person who contributed labour but not finances towards the house. Marital and Co-Habitation Law – After White v. White While the law regarding marital property has evolved after White, the law regarding property between co-habitees has not. Abbott v. Abbott12 continues to state that the only conduct that counts on behalf of the unmarried partners, with regards to beneficial property interest, is financial – such as paying money to improve the property, or making payments into a joint account. The Abbott court does state that contributing labour to improve the home would be taken into account, but this would probably also work against the female partner, who might not be able to, or have the knowledge, to improve the home. Jones v. Kernott.13 is another case that recognizes that property might be divided according to conduct. In that case, the man was the one who was trying to seek a beneficial interest in the home. He had left the house, but did not pay child support for the couple's children. The woman had paid over 80% of the equity in the home. The woman was entitled to 90% of the home equity, because Kernott did not pay bills when he left the house, and did not contribute financially to the children. The court looked at conduct in awarding the woman most of the equity. This is, therefore, one case where conduct was considered. Oxley v. Hiscock is another case that is post-White. 14 Oxley held that, even if the property was in the name of only one partner, if both contribute towards the home, then both have an interest in the property. Stack v. Dowden [2007]15 is another case, and it shows that the evolution regarding cohabiting couples is slightly evolved. This is because Stack did not automatically assume that the non-working spouse is not entitled to an interest. Rather, the court needs to look at a variety of factors. These factors are – in whose name is the property? How much financial contributions did each party make towards the property? How do the parties arrange the finances and discharge household expenses? Stack represents an evolution, of sorts, in that the court recognized in this case that sometimes a partner might contribute financially towards the home – perhaps the agreement was that one partner would pay the mortgage, while another partner would pay the household expenses, including utilities, food, child care, etc. In that case, although one of the partners is not contributing directly towards the household expenses, the partner is still contributing financially towards the partnership itself. The Stack court recognizes the reality of this situation, and this is perhaps the first UK case to do so. Discussion While the law has evolved after White with regards to married couples, the law has not evolved in the same manner with cohabiting couples. This is because the law has not decided, as it has in White, that the non-contributing partner in a cohabiting relationship is due the same amount of respect as a wife or husband would be, if the wife or husband is not contributing financially towards the home. Even the cases post-White still show a bias against the partner who does not direct financial contributions to the home. Diduck (2000)16 states that although the White clarified the law under the Matrimonial Causes Act 1973,17 in favour of the non-working spouse, the danger would be that the law would be confined to marital cases, and that seems to be how the UK law has evolved – applying the Matrimonial Causes Act 1973 in an equitable way for married persons, yet not extending the same equity to non-married persons.18 The fact is that conduct should always have a bearing upon property division.19 This is particularly true when there are children involved,20 as the children should be able to live comfortably, and, if the woman in a cohabitating partnership is awarded the children, she cannot care for them comfortably without a property settlement.21Cooke (2001)22 states that this is the priority – that a roof would be over everybody's head after a breakdown of a relationship. This should be true, whether the couple is married or not. Unfortunately, there has not been a bright-line White rule with cohabiting couples. Therefore, the courts are not encouraged to make an equitable property division between these couples. This is one area where the law must evolve further. Moreover, even with the White case used as precedent, there is an issue with the married couples. Namely, that the White case merely encouraged courts to divide marital property up equitably. There is no statutory authority for this. This means, essentially, that property division is still case-by-case, and this would also mean that arbitrary judgments might cause property division to be less for one spouse than what it should be. The Parliament would do well to pass some kind of statutory guidance that will give courts concrete factors to examine in every marital case. This would make the process of dividing up property much more fair. To this end, Parliament should recognize that ancillary relief, which is financial relief given to a spouse after a divorce, and might include alimony, lump sum payments, property adjustment orders (such as ordering that property is transferred to the husband or the wife) and pension sharing orders,23should not entirely be a matter of judicial discretion. A judge may order any of the above as ancillary relief, but the judge does not have concrete guidance on how this should be done. If Parliament could pass some kind of statute that gives concrete factors that a judge is required to use when giving ancillary relief, in that the judge must give the factors in his judgment and show how, using these factors, he or she made the ancillary judgment that he or she did, then this would go a long way towards ensuring that property division is more equitable. Conclusion The marital property law before White was biased against the spouse who was not working, but taking care of the house or taking care of children.However, White changed this in favour of the non-working spouse. This is important for children's stability and for the woman's stability, especially because the woman might have given up a career or education to raise children, and that is the reason why she is not working. To not recognize this would be inequitable, so White is a positive development. That said, there has not been as much of a positive development when a couple is not married. The court might have a policy interest in not treating these couples the same as married couples – this might be why the female, or the non-working partner, is not awarded an equitable deal in cohabitation breakups. However, the situation is often virtually identical to a married situation – just as in a married partnership, in cohabitation, a female may be staying home and taking care of the couple's children. The father might be doing the same. Therefore, the policy interests are the same – making the non-working partner whole by acknowledging the contribution that the partner has made towards the partnership by taking care of the couple's children. The other policy interest – that the non-working partner not be punished because he or she has taken care of the children – is also the same in cohabitation as in marriages. Yet the court does not treat the two situations the same. This is inequitable, and should change. The court should treat cohabitations the same as marriage, especially if there are children involved. Bibliography Secondary Sources Articles Asland, J. & Waaldjik, K. (2005) Major legal consequences of marriage, cohabitation and registered partnership for different and same-sex partners. In Waaldjik, K. (ed.) (2005) More or Less Together: Levels of Legal Consequences of Marriage, Cohabitation and Registered Partnership of Different-Sex and Same-Sex Partners: A Comparative Study of Nine European Countries. Paris: Institut National d'Etudes Demographiques, 155-167. Bradley, D. (2001) Regulation of unmarried cohabitation in West-European jurisdiction – Determinant of legal policy. International Journal of Law, Policy and the Family 15: 22-50. Boele-Woelki, K. (1999-2000) Private international law aspects of registered partnerships and other forms of non-marital cohabitation in Europe. Lousiana Law Review, 60, 1053-1079. Cooke, E. (2001) “White v. White – A New Yardstick for the Marriage Partnership,” Child and Family Law Quarterly, 13, pp. 81-101. Diduck, A. (2001) “Fairness and Justice for All? The House of Lords in White v. White,” Feminist Legal Studies, 9(2), pp. 173-183. Eckelaar, J. (1998) “Should Section 25 be Reformed?” Family Law 469. Flueckiger, J., Morton, S. & Cunningham-Burley, S. (2008) Understanding co-habitation: A critical study of the living together as husband and wife rule in UK social security law. Centre for Research on Families and Relationships. Perelli-Harris, B. & Gassen, N. (2012) How similar are cohabitation and marriage? Legal approaches to cohabitation across Western Europe. Population and Development Review, 38(3), 435-467. Books Barlow, A., Duncan, S., James, G. & Park, A. (2005) Cohabitation, Marriage and the Law: Social Change and Legal Reform in the 21st Century. Portland, OR: Hart Publishing. Davis, G., Cretney, S. & Collins, J. (1994) Simple Quarrels. London: Clarendon Press. Perry, A., Douglas, G., Murch, M., Bader, K. & Borkowski, M. (2000) How Parents Cope Financially on Marriage Breakdown. New York: Family Policy Studies Centre. Primary Sources Statutes Matrimonial Causes Act 1973. Cases Abbott v. Abbott [2007] UKPC 53 White v. White [2001] 1 A.C. 596. Pettit v. Pettit [1970]AC 777 Gissing v. Gissing [1970] UKHL 3 Lloyd’s Bank v. Rosset [1990] 2 WLR 867 Burns v. Burns [1984] Ch. 317. Drake v. Whipp [1986] Ch 638 Jones v. Kernott [2011] UKSC 53. Oxley v. Hiscock [2004] EWCA Civ 546 Stack v. Dowden [2007] UKHL 17 Read More