Breakdown of status relationship financial and legal consequences

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Family Law (Topic 2: financial and legal consequences breakdown) Mind Map on Breakdown of status relationship financial and legal consequences, created by rebeccamusgrove9 on 04/07/2014.

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Breakdown of status relationship financial and legal consequences
1 Divorce
1.1 Part 1 Matrimonial Causes Act 1973. Section 1 (2) sets down a single ground for divorce that the marriage has broken down irretrievably. This is based on proof of 1 of 5 facts.
1.1.1 Adultery
1.1.1.1 Voluntary sexual intercourse with a man and woman one or both of whom is married. Sexual intimacy is insufficient. Must show that adultery has been committed and that it is intolerable to live with. The intolerance need not be related to the adultery. You cannot rely on your own adultery or if you have lived with your spouse for six months after discovering the adultery.
1.1.2 Unreasonable Behaviour
1.1.2.1 Buffery v Buffery; the test to apply is whether a right thinking person looking at the particular parties and all the circumstances and characters, would say that the petitioner could not reasonably be expected to live with the respondent. The 'grave and weighty' test was wrong.
1.1.2.2 Birch v B, found the judge had erred in applying an objective rather than a subjective test. Dogmatic, didatic and chauvinistic behaviour towards a sensitive wife amounted to behaviour with which the wife could not reasonably be expected to live under.
1.1.2.3 Butterworth v B, Husband appealed against a decree nisi on the basis of an 'accumulation of behaviour'. The court set aside the decree and said that h had a right to oppose the decree until the allegations were proved on a balance of probabilities. The recorder had failed to deal justly with H.
1.1.2.4 It does not need to be shown that the respondent behaved unreasonably only that the petitioner cannot be expected to live with him or her.
1.1.3 Desertion
1.1.3.1 There must be actual separation for no good reason without the consent of the petitioner. There must be separation of at least two years, an intention by the respondent to desert the partner, no consent by the petitioner to the desertion and no just cause to the desertion.
1.1.4 2 years separation with consent
1.1.4.1 It must be shown that the parties lived apart for two years AND that the respondent consents to the divorce. If there is no consent then must rely on the five year fact.
1.1.5 5 years separation
1.1.5.1 There must be proof that the parties have lived apart for five years. There is no need to show that the respondent consents.
1.1.6 If divorce or dissolution is granted then the marriage is over. If one of the five facts cannot be proved then a divorce cannot be granted. If one of the facts is proved but there is no irretrievable breakdown then there will be no divorce. there must be the ground and one of the facts. It is ultimately a decision for the court.
1.2 Bars to divorce
1.2.1 Even if one of the five facts is proved if one of the following bars applies the court may not grant a divorce. Section 3(1) must have been married for one year, if it is shorter then should seek annullment. Section 5 provides a bar for five year separation where great financial hardship would be suffered or it would be wrong in all the circumstances. Section 12A provides that there must be a religious divorce as well if one party refuses the court might refuse the legal divorce. Section 10(2) provides that on 2 or 5 year basis of separation it will only be granted if the financial arrangements are fair and reasonable for the petitioner. Section 41 a divorce can be refused if the court wishes to make orders for the children but needs time for further consideration.
1.3 Reform. Consider whether it should be hard or easy to divorce, should it be fault based, should there be blame and should reconciliation be encouraged. The 1996 Family Law Act sought to reform divorce but it was abandoned. It sought to have divorce take place over a year, initial information meetings, encourage discussion and reconiliation.
1.4 Dissolution of a civil partnership is on the same basis as divorce but with only four facts, adultery is not included.
2 Financial Provision upon Breakdown of relationships
2.1 The family property will be redistributed upon divorce. In 2011 the divorce rate was 43%. A study conducted by Fisher and Low showed that following divorce mens income increased by 23% whilst womens income decreased by 31%. This suggests that children may also be worse off upon divorce.
2.2 History of financial provision on breakdown
2.2.1 Originally provision for the wife for the continuance of the marriage. Coverture meant that upon marriage the women's property became her husbands. Ancillary relief was made available for the innocent wife to prevent a husband from avoiding his life long financial commitments.
2.2.2 Sidney v Sidney "According to your ability you must still support the woman you have first chosen and then discarded. if you are relieved from your matrimonial vows it is for the protection of the woman you have injured and not for your own sake."
2.2.3 Provision for guilty was wives was also developed on the basis of Sydney that marriage is a life long commitment. This also prevents their being a burden on the state.
2.2.4 1969-1984 no fault divorce led to principle of 'minimal loss' or 'equal misery'. The justification for life long provision was lost. No fault provision appears in Section 1 MCA 1973.
2.3 Principle in ancillary relief
2.3.1 No fault divorce removed the goal of keeping both parties in the same position as if they were married. The law commission suggested that this was unfair where a divorce had been forced upon an innocent or unwilling partner. The resdistribution of finances would not necessairly reflect this.
2.3.2 Law reform in 1984 introduced changes to ss23-25 MCA 1973. New duties were incorporated including the welfare of any children of the marriage must be considered first and then consider whether there should be a 'clean break'. This attempts to provide equality. It is also not certain whether a clean break is possible let alone appropriate. It may not be realistic to suggest that the couple will never be a part of each others lives again.
2.3.2.1 Charman v Charman. The president of the family division said that legislation is in need of modernisation in the light of social and other changes. Legislation without a goal is difficult to achieve and judges are struggling to apply the law in this area. It is a social policy field and a new principle needs to be established or an existing one asserte.
2.3.2.2 Maclean and Eeklar. Family forms are now complex. The introduction of civil partnerships and now same sex marriage means that the traditional methods of dividing up assets is outdated. For many years judges have given a petitioning wife one third of her husbands income. There is no longer a single value and the law has become more pragmatic rather than the abstract search for truth and justice.
2.3.3 Academics have searched for a coherent principle that links the case law. Ellman says that a more generalised approach is needed. Herring has suggested several arguments.
2.3.3.1 Spousal support and care for children. Helps children but child maintenance is provided for elsewhere.
2.3.3.2 Contract. Damages for breach of contract but this is problematic as no fault divorce.
2.3.3.3 Partnership or joint enterprise. undoing a partnership of equals. recognising assets are jointly owned and not about redistributing. The problem with this is that family property doesn't exist. Ellman says this only works in a business context when the motivations and purpose of the parties is normally clear. In a family relationship this is uncertain and cannot be conducted on the same basis.
2.3.3.4 Equality. This raises the question is it equality of outcome or equality of opportunity.
2.3.3.5 Compensation. Sacrifices are made by the wife and she should be compensated for this. How do we determine what is a true sacrifice it may have been in her best interests to make sacrifices.
2.3.3.6 The state's interests. saving public money, child-care issues, symbolic value of child care, interests of children, stability of marriage, post-divorce life and sex discrimination.
2.3.3.7 If no satisfactory basis can be found for ancillary relief then the options are: Abolish maintenance or ancillary relief entirely. Endorse theoretical account and reform ancillary relief to fit. try harder and find a new theoretical basis for the existing law. Pretend it doesn't matter and focus on statute (Parlour v Parlour). Pretend it doesn't matter and wait for Nuptial agreements to become binding.
2.4 Legislative regime
2.4.1 In practice low value every day cases are not overly concerned with the legal doctrine. A needs based approach is taken. The big money cases and principles distort the reality of most cases.
2.4.2 Section 25 MCA 1973 provides guided discretion for the courts assessment and lists all of the factors to be considered.(1) consideration of any children they are to be paramount. This includes meeting the children's need for secure accommodation, rehousing the other parent satisfactorily. Meeting the reasonable needs of both parties. the importance of observing the need for self-sufficiency. Jointly owned capital to be divided equally.
2.4.3 Pre-White (2001) approach. In Dart v Dart the court interpreted the place of 'reasonable requirements' in s25(2). There must be an objective appraisal of what the applicant subjectively requires to ensure it is not unreasonable. Non-propertied wives were expected to demonstrate an extraordinary or exceptional contribution to the marriage or direct financial contribution before there were thought in fairness to deserve it. The courts seemed to take the approach that it was the husbands money and assets and so long as the wife's requirements were met she had no further claims.
2.4.4 White v White (2001). Lord Nicholls rejected attaching significance to the wife's 'reasonable requirements' and favoured a fairness test. Describing fairness as lying in the eye of the beholder.Fairness should be understand as non discriminatory so that contributions to the marriage and family in all forms are recognised regardless of source. This is not to advocate and equal division but rather to affirm that importance of considering all the factors. In the majority of cases one party will benefit more than another. Before a firm conclusion is reached it should be measured against the 'yardstick of equality'. There should be no discrimination between husband and wife or between money earner and home-maker.
2.4.5 Miller v Miller; McFarlane v McFarlane (2006). Fairness is an elusive concept, grounded in social and moral values. The idea of fairness may change over time. Like cases should be treated alike the court should articulate in a broad sense the unspoken principles guiding the court's approach. Three different elements of fairness. Meeting the parties future needs; reflecting that a relationship creates interdependency and therefore provision is needed for the independence to be re-established. Providing compensation for any economic disadvantage one party may suffer as a result of the relationship. Sharing/award to reflect both parties' entitlement to share in the assets of the relationship as a result of their equality in the relationship and commitment to each other during the relationship. The yardstick of equality is an aid not a rule.
2.4.5.1 Baroness Hale refers to this as the three distributive principles. The objective is to give each party an equal start on the road to independent living. there cannot be a hard and fast rule about whether we should start with equal sharing and then departing or whether we should start with need and then balance to make it equal.
2.4.6 Charman v Charman (2007). All property apart from exceptions subject to computation and not a reason to depart from equality. There is an inter-relationship between the three distributive principles if there is conflict then fairness will determine the outcome. Equal sharing is not a starting point the enquiry is in two stages computation and then distribution.
2.4.7 The meaning of compensation. RP v RP; There is a finite pot of money to be divided depending on the weight of the two claims. The parties contributions equal but different are to be given importance. On the basis of equality the word compensation adds very little. In CR v CR; in achieving fairness it is important not to double count and adding compensation as an extra. In regard to loss of career prospects this should not be factored into the outcome. Any loss of career is likely to have been compensation by the lifestyle provided by the husband. In VB v JP; compensation should not be separated out but be treated as one of the strands to be considered in the fairness test. Any compromise by the wife and to the outcome if she had not done so is speculative. It is not practical to try and place a monetary value on such a compromise.
2.4.7.1 Two developments occurring at the same time. First shifts between focusing on the statute and focusing on judicial principles. More erratic than gentle pendulum swing in either direction. Second shifts between focusing on the different elements of the Section 25(2) exercise in 'big money' judicial decisions, decisions which have also sought to clarify the overarching ideas of the exercise at the same time.
2.5 Application Section 25 MCA 1973
2.5.1 Lawrence v Gallagher. Civil partnership case. Stick to the legislated checklist the phrases in judgments are designed to safeguard against the unfair outcome. The linguistic devices risk placing weight on the wrong factors.
2.5.2 Section 25(1) the welfare of the children is the first consideration. Suter v Suter and Jones, Miller, McFarlane.
2.5.3 Section 25(2)(a). Non-matrimonial assets, White and Lord Nicholls. Miller, McFarlane and Lord Nicholls and Baroness Hale. Difference on what is to be considered matrimonial property. J v J (2009) pre acquired gift or asset or increase in value of the company after separation. N v N (2010) If there is a good reason to depart from the sharing principle in relation to some of the assets then it should only look at those assets not the assets as a whole.
2.5.3.1 K v L (2011) to recognise a wife's contirbutions to the home and then to recognise her financial contributions in addition is not to discriminate but recognises a substantive difference.Special contirbution arises in circumstances in which a spouse's contirbuition to the creation of the matrimonial property has been so extraordinary as to dictate departure within the sharing principle from the ordinary consequence of its equal division.Jones v Jones potential of a company taken at valuation date of marriage. S v AG and another lottery winnings non-matrimonial property. Also look at earning capacity and subsequent increases in income/captial.
2.5.4 Section 25 (2)(b) comes within Miller, McFarlane. J v J (2009) the starting point for determining the wife's relationship generated needs is the substantial income support provided by the husband during the marriage. The standard of living throughout the marriage.
2.5.5 Section 25 (2)(d) impact upon the needs assessment, compensation arguments and the equal sharing principle. May include pre-marital cohabitation depends on the circumstances. McCartney v Mills-McCartney (2008), the wife's needs are the dominant factor as the husbands fortune was earned before the marriage, the standard of living lasted only through the short marriage, the daughter will be provided for and house generously.
2.5.6 Section 25 (2)(f) core to the equal sharing principle. Cowan v Cowan, stellar contributions. Consider the relationship between (d) and (f) if homemaker contributions are to be valued equally to breadwinner contributions does the duration of the marriage change the outcome of the equal valuation?
2.5.7 Section 25 (g) speaks most clearly to equal sharing rather than equal division. Presence of nuptial contact could be taken into account here. Very rarely a live issue.
2.5.8 Section 25A(3) and 28(1A). there is a duty on the court to consider whether a 'clean break' can be achieved. This is a procedural rather than a substantive consideration.
2.6 The role for private ordering
2.6.1 Private ordering is a way to resolve financial provision without litigation. Under Section 33A MCA consent orders can be made. Under Section 34-35 Separation agreements can be made.
2.6.2 Nuptials
2.6.2.1 Post nuptial agreements Macleod v Macleod(2008). Setting aside policy concern re all nuptials aside from usual contractual reasons the only other reason is that it is contrary to public policy to plan for future separation. Pre-nuptial agreements are against public policy. Post-nuptial agreements and ss34-35 MCA parliament had laid down a way in which the couple can make arnagements for their property and finance whilst married. The parties can make an application to vary the arrangements such an application is based on a change of circumstances or failure to make proper provision for a child. The same applies to anicallry relief proceedings. Pre-nuptial agreements are generally thought of as being contrary to marriage. they provide for an uncertain and unhoped for future wheras as post-nuptial agreements provide for a current situation developed through marriage.
2.6.2.2 Crossley v Crossley (2008). Pre-nuptial agreements are of 'magnetic importance' in this case. The role of contractual dealing the opportunity for autonomy of the parties is becoming increasingly important.
2.6.2.3 Radmacher v Granatino (2009). The majority endorses MacLeod that public policy arguments against pre-nuptial agreements are obsolete. Also rejects the confinement to post-nuptial agreements for two reasons; s35 MCA and and there is no material distinction between pre and post.The court when considering ancillary relief is not bound by nuptial agreements and the couple cannot oust the jurisdiction of the court by an agreement, any agreement should be given appropriate weight. e..g those entered into freely and with a full appreciation of the implications. The parties should be held to their agreement in such a case if it is fair to do so. Nuptial agreements are not contracts and it is irrelevant to consider whether they are.
2.6.2.3.1 The fact of the agreement is capable of altering what is fair and should be weighed in the balance. Of the three strands identified in White v White and Miller v Miller it is need and compensation that is most relevant as an agreement could leave one party in real need while the other flourishes. Weight should be given to a nuptial agreement through respect of individual autonomy. Hale says that marriage is a status and a contract so that parties don't get to decide all it's legal consequences.
2.6.2.4 Reform has been suggested by Baroness Hale in Macleod. The law com have also suggested reform based on arguments of supporting marriage, autonomy, certainty and cost of discretion, international perspective, hardship and social cost of reform. The role of marriage and how we marriage depends on whether we think nuptials are relevant.
2.6.2.5 V v V (2011) the non-discriminatory approach identified is in line with the autonomy principle in Granatino. The upshot of Whit and Granatino is that earlier reasoning developed as part of the balancing act in judicial discretion conferred by MCA were wrong in law and so may not have produced a fair result judged by reference to the correct approach to statutory discretion.
2.7 Legal regulation and financial position cohabitees
2.7.1 Sutton v Mischcon de Reya (2004). There is nothing contrary to public policy in a cohabitation agreement governing the property relationship between adults who intend to cohabit or who are cohabiting for the purposes of enjoying a sexual relationship. The contract will be between the cohabitors.
2.7.2 Property adjustment for the childrens benefit comes under s15 Children Act 1989 A v A (1994). Maintenance of children comes under Section 1 Child Support Act 1991 R (kehoe) v Secretary of state for work and pensions, Hale says focus should be on children's rights, Hope says neither parent has a right against the other.
2.7.3 Ownership of real property. Two stage to the analysis. (1) Establishing the existence of the trust- Is there a common intention that the shares be other than those at law? (2) Quantifying each party's share-In what proportions should be the beneficial shares be held?
2.7.3.1 Stage (1) lloyds Bank v Rosset (1991), contributions to the purchase price by the partner who is not the legal owner gives rise a constructive trust. BUT Stack v Dowden (2007) AND Abbott v Abbott (2007) AND Jones v Kernott (2011) intention can be inferred and may be imputed but not clear.
2.7.3.2 Stage (2) Oxley v Hiscock (2004) constructive trust and proprietary estoppel would be the same in this case. If there is a common intention for both to have a beneficial interest in the property but there is no evidence as to what the intended shares would be then it must be decided on what is fair at the time. In Stack v Dowden (2007) the fairness/broad merits approach was rejected and advocated a search for the parties true intention whether actual inferred impliedimputed. This can take place with the parameters of fairness.
2.7.3.2.1 Jones v Kernott (2011) attempted to clairfy Stack, Where people purchase property jointly then assumption intend jointly in equity. Where in sole name one party. Both have a common intention constructive trust. This is practical and recognises the commitment of joint ownership. The presumption can be rebutted, where the parties have separate finances this is strong evidence. An inference is drawn where an actual intention is deduced from the dealings of the parties; an imputation is one attributed to the partiesby the court. It will often be difficult to find a common intention as to the proportions to be shared in this case the court must impute and intention. Where intention can be discovered this must be followed even if the court does not consider it fair. Fairness should be determined by all the circumstances. There is a difference of opinion between the judges on the reasoning.
2.7.4 Reform. Cohabitation Bill (2009). Proposes that a cohabitant be defined as living together as a couple with either a child or have lived together for a period of 5 years. The standard prohibited degrees would also apply. There is also to be discretion for serious financial hardship to apply in 2 year cases. Cohabiting families are increasing and it is important to protect them.
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