financial remedies update 13 october 2011 michael horton

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Financial Remedies Update13 October 2011Michael Horton

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Overview

• Case law last 12 months ish• Family Procedure Rules

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International element

• News report 5 September 2011• French court orders H to pay W €10,000• Damages for ‘not enough sex’• Breach of Art 215 of Code Civile

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• English court’s view? …

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• ‘Once a week is enough’• Mason (1980) CA

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Radmacher

• No presumptions, but• Uphold agreement unless …• … And it’s just one of the factors

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Bankruptcy & order for sale

• Standard order for sale• When do beneficial interests alter?• When order made/ decree absolute?• Completion of sale?• Warwick v Yarwood says latter

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Bankruptcy & order for sale

• So, if bankruptcy imminent or feared• Redraft order for sale (2.4)

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Annulment of bankruptcy

• Do it, if at all, early• Make provision for trustee’s expenses• Mekarska: no annulment otherwise• Should bankruptcy court adjourn if there

are pending divorce proceedings?

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Imerman

• Not all doom & gloom• Documents may not be confidential• ‘Secret plan to hide assets’• Documents clearly show, post form E,

there has been non-disclosure

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Cohabitation

• Periodical payments order in force• Effect of payee’s cohabitation• Just goes to quantum• Not to be equated with re-marriage• What ought partner to contribute to reduce

payee’s income needs

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Cohabitation

• K v K Coleridge J• Why not equate with re-marriage?

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Cohabitation

• This is ‘heresy’• So says Court of Appeal in Grey

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Cohabitation

• Why is pre-marital cohabitation different?• See 4.2.3• Outcome at 4.2.6

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Appeals

• Kaur v Matharu (pre-FPR)• Children appeals more lenient re fresh

evidence• ‘May be’ so in ancillary relief• Probably survives FPR 2010 (5.1.2)

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Appeals

• Need permission• 21 days• Consider need for updating evidence• If appeal allowed, J to exercise discretion

afresh or send back down?

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Barder appeals: Richardson

• Wife’s death not a Barder event• Her award not based on needs• ‘Earned her share’

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Richardson

• Impact of damages claim against business• Lack of full cover a mutual mistake• Entitling H to set aside?• No, it was a ‘known unknown’ (5.4.5)

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Richardson

• But insurers refusing any liability• This was ‘unknown unknown’• H did not know they would refuse and had

no way of finding out

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Post FPR set aside

• PD says must appeal• But set aside still possible• See FPR r 4.1(6) (5.5.2)

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Joinder/ intervention

• Join 3P• Mini ToLATA claim within the financial

order proceedings (6.1)• Or … (6.2)

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• Don’t just invite 3P to intervene (6.3)• If they don’t, will be no issue estoppel

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• How to join?• Goldstone says there is power to join• Even though there is no specific power in

the rules

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The new inspection appointments

• Order for disclosure against non-party under FPR 21.2

• Or seek permission to issue witness summons

• Don’t forget Bankers Book Evidence Act

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Non-matrimonial property

• Jones approach:• Work out the current value of the pre-

acquired asset• Deduct that from total assets• Divide result by two• Cross check result as % of overall

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Non-matrimonial property: Jones

• Keep needs and sharing separate• Compare results (7.1.2)

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• H’s co worth £2m at time of marriage• CA say this now worth £9m• So matrimonial property is £25m less £9m• W gets 50% of £16m, ie £8m

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• How did H’s £2m co in 1996 …• … become £9m in 2006?• Springboard• Plus passive economic growth• NB cross-check on % of overall

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Building blocks?

• Pleadings?• Issues• Findings• Evidence

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Pre-acquired assets: N v F

• Same approach• But needs left W with 44% of overall• NB ‘add backs’ at 7.2.2• Evidence of earning capacity (7.2.3)

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Pre-acquired assets: Robson

• Assets all pre-acquired inheritance• Needs based claim• W aware living on mismanaged

inheritance• Could not base future income needs on

excessive marital standard of living

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Pre-acquired assets: Robson

• NB no interest can run pre-dA (7.3.5)• Timing of payment of lump sum• Where coming from proceeds of sale• Guidance at 7.3.7• Art not science!

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Pre-acquired assets: K v L

• W shares worth £680k on marriage• Now, pre-tax £58m• Family lived off (not all of) dividends• W offered £5m• Bodey J ordered just that

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Pre-acquired assets: K v L

• No sharing• Just needs, generously interpreted• H’s appeal to CA dismissed (7.4.4)

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Pre-acquired assets: Whaley

• No classification into ‘dynastic’• & ‘settlor-beneficiary’ trusts• Test still whether trustees likely to advance

capital• W not confined to needs but small

‘sharing’ element on top

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Pre-acquired assets: Mansfield

• Personal injury damages not immune from financial orders

• But court has to reflect reason why they were awarded in first place

• Mesher here once children grown up and H’s needs would increase

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Post-separation assets

• SK v WL: no need for clear boundary between matrimonial/ non-matrimonial property

• W got 40% overall• Big increase in assets over 3y separation

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Schedule 1 lump sums

• Just for capital needs?• Could not be used to obtain capitalised

child maintenance (ie in advance)• Or to clear income-related debts (ie in

arrears)• Until …

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• DE v AB Baron J• M sought housing fund• Plus lump sum partly to clear debts• DJ found CSA assessed F’s income too

low

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• On F’s appeal• Lump sum broad brush• Lump sum could cover debts incurred for

eg mortgage payments as for ‘benefit of child’

• Revenue costs could go into lump sum as CSA in error

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• CSA appeal?• CSA variation?

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Schedule 1 settlements

• Enforcement difficulties• Transfer and charge back ok

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Schedule 1 lump sumsfor legal fees

• CF v KM says yes to interim lump sum under Schedule 1

• Even if no power to order pp’s• R v F Bodey J – just for s 8 proceedings• NB cl 45 LASPO (8.6.2-3)

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Future income disparity

• Acknowledged clean break case• One party has better income• Adjust capital to reflect income

differential?• Murphy says yes

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Future income disparity: Murphy

• See 9.1.2• 8 year childless marriage• £3m to go wrong• All hallmarks of clean break & equality

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Future income disparity: Murphy

• No 65:35 split• Price of a clean break• H v high earning capacity• Unused for c 4 years before trial• ? And illiquid assets too?

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Variation of lump sum orders

• Is order at 10.1 an order for lump sums?• Or a single lump sum payable by

instalments• If latter, court can vary it under s 31

(10.3.1)• H v H says it is latter no matter how

drafted (10.3.3)

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