Family Legal Case - Essay Example

In considering how the court is likely to resolve ancillary matters, the relevant sta y provision is the Matrimonial Causes Act 1973 (MCA) and inparticular, the section 25 criteria1. Moreover, the recent decisions in Miller v Miller and Mcfarlane v Mcfarlane2will be relevant as Timothy is a relatively high earner and Ann has been a stay at home wife for many years. The MCA confers wide powers on the court in ancillary relief proceedings and the overriding purpose of sections 21-6 is to ensure a fair and reasonable result for both parties3. The main financial orders available are periodical payment orders (secured or unsecured) and a lump sum order4. Under the MCA, a lump sum order can be made to enable the payee to comply with pre-existing liabilities and expenses already incurred such as the outstanding mortgage payments in the current scenario; or alternatively it could be used to enable a spouse to take training as Ann has indicated. In such cases, an order can only be made if Timothy has the appropriate capital5. Section 25A requires courts to consider the desirability of promoting cessation of financial obligations between the parties. In ancillary relief applications, there is a mandatory judicial obligation to consider a clean break or impose a time limit on financial obligations. However, as highlighted in SRJ v DWJ,6there is no judicial presumption towards a clean break. It is further evident from the decision in Miller and Mcfarlane7, that the courts favour wives of wealthier spouses in divorce, which places Ann at an advantage8. Nevertheless, the overriding sentiment of the MCA is to encourage spouses to become independent and the courts will follow the section 25 guidelines9. With regard to the judicial approach to Ann’s demands for maintenance, in Wachtel v Wachtel10, the courts adopted a one third formula as a starting point. Moreover, as a result of the decision in White v White11the House of Lords determined a benchmark approach of equal division in surplus asset cases12. With regard to the property and maintenance, the house is jointly owned and Ann and Timothy’s children are adults and have moved away. Accordingly, the appropriate approach as highlighted in Piglowska v Piglowska13 is to consider the specific criteria in section 25(2) of the MCA, which creates no priority. Section 25(2)(a) and (b) are relevant and therefore the present and future income and other financial resources of both parties, including any increase in capacity that is reasonable to expect a party to take acquire, and their present and future needs, obligations and responsibilities will be considered14. Therefore, the courts will consider Ann’s contribution as a stay at home wife and her income earning potential against Timothy’s income, pension rights and other assets. The length of the marriage of 25 years is relevant under section 25(2)(d) and the standard of living enjoyed by the parties before the breakdown of the marriage section 25(2)(c). However, under the Matrimonial and Family Proceedings Act 1984 neither party has a right to expect the same standard of living enjoyed before the divorce. Furthermore, section 25(2)(f) and (g) specifically requires the court to consider the conduct of the parties and contribution to the welfare of the family and in the Mcfarlane case,15it was held that significant mismatches in respective contributions to the welfare of the family were relevant when making orders16. Additionally, Timothy’s affair may be relevant. Financial provision orders are made under section 23 and section 24 of the MCA including periodical payment orders (PPO), secured or unsecured, and lump sum orders. Secured periodical payments would ensure that payments would continue after death and if sufficient assets. Alternatively, any lump sum order may be made on the basis of a Duxbury17 calculation. However, as Ann wants to live in the house and receive contributions whilst she retrains and secures employment, a highly likely option would be a deferred clean break under section 25A (2) and to make a periodical payment order (PPO) in favour of Ann for limited time. With regard to the matrimonial home, there are various options available under section 24 of the MCA. Potential options include a Transfer of Property Order (TPO) or a Settlement of Property Order. Ann wants to stay in the house, however Timothy wants to sell and split the proceeds. One option would be to make a TPO on grounds that whilst Ann made no financial contribution to the property, she supported Timothy by staying at home. However, as she hasn’t worked, the difficulty for Ann is her inability to contribute to the outgoings and mortgage. Another possibility would be a Martin Order as determined in Martin v Martin18 which would enable Ann to continue living in the home regardless of there being no relevant children until a conditional event determined by the court such as her death, moving or remarrying, in which case the house would then be sold and the proceeds divided19. Therefore, it is highly likely that the court will make a PPO and a Martin Order or possibly a TPO in Ann’s favour. Moreover, in Barrett v Barrett20 it was held that limiting a PPO order was not appropriate where a wife had no job and it was uncertain as to when she would get a job. Therefore, if ordered Timothy will have the onus of applying for termination of the PPO if and when Ann becomes sufficient21. In Flavell v Flavell22 the Court of Appeal suggested that the termination of the PPO in favour of a former wife in her fifties would only be appropriate if she had a lot of capital and earning power. In Miller and MacFarlane23 it was held that fairness required wives to be compensated for reduced earning capacity and that PPOs served this purpose. All of Ann’s and Timothy’s assets will be taken into account and in the case of Michael v Michael24 inheritance expectations are generally irrelevant as these are considered uncertain, however in the Michael case25, it was suggested that courts will consider benefits under a will and in the current scenario this will be relevant as Ann has inherited £75,000. However in the Macfarlane26 decision it was held that inheritances during marriage constitute non-marital assets and on this basis, Ann’s inheritance may not be relevant27. Ann’s earning capacity will be relevant under section 25(2)(a) and Timothy thinks she should support herself. However, Ann gave up nursing years ago, is currently 52 and therefore not worked for years, which limits her employability. Nevertheless, Ann intends to retrain as a nurse. However, in Leadbeater v Leadbeater28 the Court of Appeal held it was not reasonable to expect the wife to “familiarise herself with modern office technology29” suggesting no onus to prove earning capacity or retrain on Ann’s part. Moreover, since the decisions in Miller30 and White,31it is highly likely that after a long marriage and being a mother and homemaker, combined with her age that under section 25(2)(d), Ann will be entitled to “more than just being able to survive” as asserted in M v M32. Nevertheless, both their respective needs are important. However, the courts will place value on Ann’s role as homemaker, which will be relevant in assessing a lump sum or periodical payment order on the basis that she “supplied the infrastructure and support in the context of which the husband was able to prosper and accumulate his wealth”33. Additionally, enhanced orders may be available to Ann in respect of Timothy’s pension rights34. Section 25B (4) of the MCA requires courts to consider whether to make a financial provision order in respect of pensions. Section 25(B)(4) to (6) enables courts to order an “attachment” where part of the pension funds are diverted from Timothy to Ann. Additionally, the Welfare Reform and Pensions Act 1999 enables courts to make a pension “sharing order” which directs the scheme’s trustees to transfer a specified sum of Timothy’s pension entitlement to Ann on divorce. Read More