AN INTRODUCTION TO FAMILY LAW

Chapter 4 - ANCILLARY RELIEF

ANCILLARY RELIEF ORDERS

Maintenance Pending Suit

"On a petition for divorce, nullity of marriage or judicial separation, the court may make an order for maintenance pending suit, that is to say, an order requiring either party to the marriage to make to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of the presentation of the petition and ending with the date of the determination of the suit, as the court thinks reasonable." - Matrimonial Causes Act 1973, s.22.

Principles

The principles to be applied in determining an application for maintenance pending suit were set out by Nicholas Mostyn QC in TL v ML and Others (Ancillary Relief: Claim Against Assets of Extended Family) [2005] EWHC 2860 (Fam), as follows:

"i) The sole criterion to be applied in determining the application is "reasonableness" (s22 Matrimonial Causes Act 1973), which, to my mind, is synonymous with "fairness".

ii) A very important factor in determining fairness is the marital standard of living ( F v F [1]). This is not to say that the exercise is merely to replicate that standard ( M v M [2]).

iii) In every maintenance pending suit application there should be a specific maintenance pending suit budget which excludes capital or long term expenditure more aptly to be considered on a final hearing ( F v F ). That budget should be examined critically in every case to exclude forensic exaggeration ( F v F ).

iv) Where the affidavit or Form E disclosure by the payer is obviously deficient the court should not hesitate to make robust assumptions about his ability to pay. The court is not confined to the mere say-so of the payer as to the extent of his income or resources ( G v G [3] , M v M ). In such a situation the court should err in favour of the payee.

v) Where the paying party has historically been supported through the bounty of an outsider, and where the payer is asserting that the bounty had been curtailed but where the position of the outsider is ambiguous or unclear, then the court is justified in assuming that the third party will continue to supply the bounty, at least until final trial ( M v M )."

An award of maintenance pending suit may include an element to cover a spouse's legal costs, where that spouse lacks alternative funding. The requirements for such an award were set out by Lord Justice Wilson in Currey v Currey [2006] EWCA Civ 1338 at paragraph 20:

"In my view the initial, overarching enquiry is into whether the applicant for a costs allowance can demonstrate that she cannot reasonably procure legal advice and representation by any other means. Thus, to the extent that she has assets, the applicant has to demonstrate that they cannot reasonably be deployed, whether directly or as the means of raising a loan, in funding legal services. Furthermore ... she has also to demonstrate that she cannot reasonably procure legal services by the offer of a charge upon ultimate capital recovery. I would add, fourthly, that the court needs also to be satisfied that there is no such public funding available to the applicant as would furnish her with legal advice and representation at a level of expertise apt to the proceedings"

Procedure

An application for maintenance pending suit is made in Form A and the procedure is governed by the Family Proceedings Rules 1991 rules 2.52 to 2.70.

A maintenance pending suit order may be converted into a periodical payments order upon decree absolute - Family Proceedings Rules 1991, r.2.67.

[1] F v F (Ancillary Relief: Substantial Assets) [1995] 2 FLR 45.
[2] M v M (Maintenance Pending Suit) [2002] 2 FLR 123.
[3] G v G (Maintenance Pending Suit: Legal Costs) [2002] 3 FCR 339.

Spousal Maintenance

On granting a decree of divorce, a decree of nullity of marriage or a decree of judicial separation or at any time thereafter (whether, in the case of a decree of divorce or of nullity of marriage, before or after the decree is made absolute), the court may make any one or more of the following orders:

(a) an order that either party to the marriage shall make to the other such periodical payments, for such term, as may be specified in the order;

(b) an order that either party to the marriage shall secure to the other to the satisfaction of the court such periodical payments, for such term, as may be so specified.[1]

Under a secured periodical payments order, assets of the payer will be used as security for the payments, so that if the payer defaults the payments will be made from those assets (which the payer may not dispose of whilst the maintenance order is in force).

Duration of Orders

Subject to the 'clean break' provision of s.25A, the term to be specified in a periodical payments or secured periodical payments order in favour of a party to a marriage shall be such term as the court thinks fit, except that the term shall not begin before or extend beyond the following limits:

(a) in the case of a periodical payments order, the term shall begin not earlier than the date of the making of an application for the order, and shall be so defined as not to extend beyond the death of either of the parties to the marriage or, where the order is made on or after the grant of a decree of divorce or nullity of marriage, the remarriage of, or formation of a civil partnership by, the party in whose favour the order is made; and

(b) in the case of a secured periodical payments order, the term shall begin not earlier than the date of the making of an application for the order, and shall be so defined as not to extend beyond the death or, where the order is made on or after the grant of such a decree, the remarriage of, or formation of a civil partnership by, the party in whose favour the order is made.[2]

Where a periodical payments or secured periodical payments order in favour of a party to a marriage is made on or after the grant of a decree of divorce or nullity of marriage, the court may direct that that party shall not be entitled to apply for the extension of the term specified in the order.[3]

[1] Matrimonial Causes Act 1973, s.23(1).
[2] Ibid, s.28(1).
[3] Ibid, s.28(1A).

Child Maintenance Orders

(a) an order that a party to the marriage shall make to such person as may be specified in the order for the benefit of a child of the family, or to such a child, such periodical payments, for such term, as may be so specified;

(b) an order that a party to the marriage shall secure to such person as may be so specified for the benefit of such a child, or to such a child, to the satisfaction of the court, such periodical payments, for such term, as may be so specified.[1]

Note that, subject to exceptions, the court cannot make a child maintenance order where the Child Maintenance and Enforcement Commission has jurisdiction to make a maintenance calculation.[2] For further details, see the 'The Role of the Courts' in Chapter 5.

A child maintenance order may not be made in favour of a child who has attained the age of eighteen[3], unless the child is in continuing education or there are special circumstances such as physical or mental disability.[4]

Duration of Orders

In the first instance, a child maintenance order should be specified to last until the child reaches the age of 17 and shall not in any event extend beyond the date of the child's eighteenth birthday[5], unless the child is in continuing education or there are special circumstances such as physical or mental disability.[4] The usual wording therefore is that the order will last "until the said child attains the age of 17 years or ceases full-time secondary/tertiary education, whichever is the later, or further order".

The order will also cease on the death of the person liable to make the payments.[6]

[1] Matrimonial Causes Act 1973, s.23(1).
[2] Child Support Act 1991, s8.
[3] Matrimonial Causes Act 1973, s.29(1).
[4] Matrimonial Causes Act 1973, s.29(3).
[5] Matrimonial Causes Act 1973, s.29(2).
[6] Matrimonial Causes Act 1973, s.29(4).

Lump Sum Orders

(a) an order that either party to the marriage shall pay to the other such lump sum or sums as may be so specified;[1]

(b) an order that a party to the marriage shall pay to such person as may be so specified for the benefit of such a child, or to such a child, such lump sum as may be so specified.[2]

A lump sum order may provide for the payment of that sum by instalments of such amount as may be specified in the order and may require the payment of the instalments to be secured to the satisfaction of the court.[3]

Where the court directs that payment of the sum or any part of it shall be deferred or that that sum or any part of it shall be paid by instalments, the court may order that the amount deferred or the instalments shall carry interest at such rate as may be specified by the order from such date, not earlier than the date of the order, as may be so specified, until the date when payment of it is due.[4]

[1] Matrimonial Causes Act 1973, s.23(1)(c).
[2] Matrimonial Causes Act 1973, s.23(1)(f).
[3] Matrimonial Causes Act 1973, s.23(3)(c).
[4] Matrimonial Causes Act 1973, s.23(6).

Property Adjustment Orders

(a) an order that a party to the marriage shall transfer to the other party, to any child of the family or to such person as may be specified in the order for the benefit of such a child such property as may be so specified, being property to which the first-mentioned party is entitled, either in possession or reversion;

(b) an order that a settlement of such property as may be so specified, being property to which a party to the marriage is so entitled, be made to the satisfaction of the court for the benefit of the other party to the marriage and of the children of the family or either or any of them;

(c) an order varying for the benefit of the parties to the marriage and of the children of the family or either or any of them any ante-nuptial or post-nuptial settlement (including such a settlement made by will or codicil) made on the parties to the marriage, other than one in the form of a pension arrangement;

(d) an order extinguishing or reducing the interest of either of the parties to the marriage under any such settlement, other than one in the form of a pension arrangement [1].

[1] Matrimonial Causes Act 1973, s.24(1).

Pension Attachment Orders

A pension attachment order (formerly known as an 'earmarking' order) requires the person responsible for the pension arrangement (i.e. the trustees or managers of the pension fund), once the pension becomes payable, to pay a percentage[1] of the pension income and/or lump sum to the non pension-holding spouse.[2] The lump sum may be the lump sum payable on retirement, or a lump sum payable upon the death of the pension holder[3], and where the party with pension rights has a right of commutation, the court can require him to exercise it to any extent.[4]

Note that pension attachment and pension sharing orders may not both be made in respect of the same pension arrangement.[5]

Pension attachment income orders are a form of maintenance order and therefore end on the death or remarriage of the recipient, and can be varied at any time. Pension attachment lump sum orders may also be varied.[6]

Pension attachment orders have proved not to be very popular. Their deficiencies were succinctly set out by Mr Justice Wilson in Smith, R (on the application of) v Secretary of State for Defence & Anor [7]:

"It is relevant to the present claim for me to stress the limitations of an attachment order as a vehicle for making provision for a wife out of the husband's pension rights. It does not carve out of his rights pension rights for her, bespoke to her needs and in particular to the length of her life. It merely impresses upon whatever may be payable to the husband under a pension scheme a compulsory redirection to the wife in satisfaction of his obligations under court orders. Thus no part of his pension is payable to the wife, whatever her age and however great her need, until, within the limits open to him under the scheme, the husband chooses to retire. Even more significantly, no further payment falls to be made to her in the event that following his retirement he predeceases her. In a sentence, the problem is that, notwithstanding divorce, the wife who has the benefit only of an attachment order remains hitched to the husband's wagon."

In practice, pension attachment orders are most commonly used where the pension-holding spouse is close to retirement, or has retired.

[1] Matrimonial Causes Act 1973, s.25B(5).
[2] Matrimonial Causes Act 1973, s.25B(4).
[3] Matrimonial Causes Act 1973, s.25C(1).
[4] Matrimonial Causes Act 1973, s.25B(7).
[5] Matrimonial Causes Act 1973, s.24B(5).
[6] Matrimonial Causes Act 1973, s,31(2)(dd).
[7] [2004] EWHC 1797 (Admin), [2005] 1 FLR 97.

Pension Sharing Orders

A pension sharing order is an order which—

(a) provides that one party's—

(i) shareable rights under a specified pension arrangement, or

(ii) shareable state scheme rights,

be subject to pension sharing for the benefit of the other party, and

(b) specifies the percentage value to be transferred.[1]

"shareable rights under a specified pension arrangement" essentially includes all pension arrangements, save for widows' pensions.[2]

"shareable state scheme rights" includes the additional State Pension, but not the basic State Pension.[3]

Note that pension sharing orders may only be made on or after the granting of a decree of divorce or nullity[4] - they are not available on a judicial separation - and will only take effect upon decree absolute.[5]

A pension sharing order may not be made where the pension arrangement is already subject to a pension attachment order.[6]

In practice, the effect of a pension sharing order is to transfer a percentage of the pension-holder's pension fund into a pension fund belonging to the receiving party. The receiving party's fund may be with the same pension provider (an 'internal transfer') if the provider allows this, or with a different pension provider (an 'external transfer').The percentage is calculated by reference to the Cash Equivalent Transfer Value ('CETV') of the pension holder's fund, as at the valuation date, which is specified in the order. The order will require the person responsible for the pension arrangement (i.e. the trustees or managers of the pension fund) to implement the transfer within four months from the date on which the order takes effect or from the date that they receive it, whichever is the later.[7]

[1] Matrimonial Causes Act 1973, s.21A(1).
[2] Welfare Reform and Pensions Act 1999, ss.19 - 46.
[3] Welfare Reform and Pensions Act 1999, s.47.
[4] Matrimonial Causes Act 1973, s.24B(1).
[5] Matrimonial Causes Act 1973, s.24B(2).
[6] Matrimonial Causes Act 1973, s.24B(5).
[7] Welfare Reform and Pensions Act 1999, s.34(1).

FACTORS TO BE CONSIDERED BY THE COURT

Introduction and s.25

In deciding whether, and how, to exercise its powers to make financial provision and property adjustment orders the court must have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen [1]. As regards the exercise of these powers in relation to a party to the marriage, the court shall in particular have regard to:

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;

(g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;

(h) . . . the value to each of the parties to the marriage of any benefit . . . which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.' [2]

The court should also consider the appropriateness of a 'clean break'. [3]

As pointed out by Lord Nicholls in White v White [4], the legislation does not state explicitly what is to be the aim of the courts when exercising its powers. Thus, he said: " Implicitly, the objective must be to achieve a fair outcome " [5]. In seeking to achieve a fair outcome the court should not discriminate between husband and wife and their respective roles. There is no presumption of equal division, but before making an order that departs from equality the court should test the proposed order against the yardstick of equality of division, which " should be departed from only if, and to the extent that, there is good reason for doing so " [6].

[1] Matrimonial Causes Act 1973, s.25(1).
[2] Matrimonial Causes Act 1973, s.25(2).
[3] Matrimonial Causes Acy 1973, s.25A.
[4] [2000] UKHL 54.
[5] At paragraph 23.
[6] Ibid, at paragraph 25.

The General Duty

The general duty of the court in deciding whether to exercise its powers to make ancillary relief orders and, if so, in what manner, is to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.[1]

All the circumstances of the case: As has already been seen , s.25(2) sets out a list of the matters to which the court should have particular regard. The requirement to have regard to all the circumstances of the case is therefore effectively a 'cover all' for any relevant matters that are not mentioned in s.25(2). For example, s.25(2) makes no mention of pre-nuptial agreements, but it has for some years been the case [2] that the existence of a pre-nuptial agreement is one of the circumstances to which the court should have regard - indeed, in Crossley v Crossley [3] Lord Justice Thorpe described the existence of the pre-nuptial agreement "as not simply one of the peripheral factors in the case but as a factor of magnetic importance".

First consideration to the welfare of any child: Note that this is not the same as the "paramount" consideration as in children matters, as was made clear by Sir R Cumming-Bruce in Suter v Suter & Anor [4]:

"I collect an intention that this consideration is to be regarded as of first importance, to be borne in mind throughout consideration of all the circumstances including the particular circumstances specified in section 25(2). But if it had been intended to be paramount, overriding all other considerations pointing to a just result, Parliament would have said so. It has not. So I construe the section in requiring the court to consider all the circumstances, including those set out in subsection 2, always bearing in mind the important consideration of the welfare of the children, and then try to attain a financial result which is just as between husband and wife."

Note also that the consideration only applies to children of the family (see The Statement of Arrangements in Chapter 2) and only during their infancy, although the courts do recognise that children often do have needs that extend well beyond their eighteenth birthday.

[1] Matrimonial Causes Act 1973, s.25(1).
[2] For example K v K (Ancillary Relief: Prenuptial Agreement) [2003] 1 FLR 120.
[3] [2008] Fam Law 395, [2007] EWCA Civ 1491, [2008] 1 FLR 1467, [2008] 1 FCR 323.
[4] [1987] 2 FLR 232, [1986] EWCA Civ 7, [1987] 2 All ER 336, [1987] Fam 111, [1987] 3 WLR 9, [1987] FCR 52.

The Clean Break - s.25A

Before making exercising its powers to make an ancillary relief order in favour of a spouse, the court is obliged "to consider whether it would be appropriate so to exercise those powers that the financial obligations of each party towards the other will be terminated as soon after the grant of the decree as the court considers just and reasonable".[1]

Further, where the court decides in such a case to make a periodical payments or secured periodical payments order in favour of a party to the marriage, the court shall in particular consider whether it would be appropriate to require those payments to be made or secured only for such term as would in the opinion of the court be sufficient to enable the party in whose favour the order is made to adjust without undue hardship to the termination of his or her financial dependence on the other party.[2]

In addition, where on or after the grant of a decree of divorce or nullity of marriage an application is made by a party to the marriage for a periodical payments or secured periodical payments order in his or her favour, then, if the court considers that no continuing obligation should be imposed on either party to make or secure periodical payments in favour of the other, the court may dismiss the application with a direction that the applicant shall not be entitled to make any further application in relation to that marriage for such an order .[3]

A clean break may not be appropriate where there is insufficient capital available to compensate a party for the loss of periodical payments. Thus, for example, a wife may be awarded periodical payments in excess of her income needs, to enable her to build up capital.[4]

[1] Matrimonial Causes Act, s.25A(1).
[2] Ibid, s.25A(2).
[3] Ibid, s.25A(3).
[4] As in Parlour v Parlour [2004] EWCA Civ 872.

Income, Earning Capacity, Property and Other Financial Resources

"A court should first consider, with whatever degree of detail is apt to the case, the matters set out in s.25(2)(a), namely the property, income (including earning capacity) and other financial resources which the parties have and are likely to have in the foreseeable future."[1] The full wording of s.25(2)(a) is: " the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire ".

The following are some commonly arising issues under this heading:

Earning capacity

If there is evidence that a party can reasonably increase their income then the court can attribute to that party an earning capacity greater than their current income [2]. Thus, for example, a wife who gave up work to look after the children may be expected to find work again once the children are of school age, provided that there is suitable work available. Similarly, if a party is artificially keeping their income down, for example by not working full time when they are able to do so, then they may be attributed the higher earning capacity that they 'ought' to be receiving.

Resources of a new partner

Whilst the court will require each party to disclose brief details of any new partner's means on their Form E, the court may not make an order that can only be satisfied by utilising a new partner's resources [3]. However, the new partner's financial resources may be relevant [4], as they may reduce that party's needs, for example where that party shares outgoings with a new partner.

Date of valuation

Assets will normally be valued as at the date of the hearing [5], irrespective of when the parties separated. However, if there has been a lengthy separation then any assets acquired after the separation should be classified as 'non-matrimonial property' and may be distributed differently to 'matrimonial property' [6], unless they are required to meet the needs of the parties [7].

Inheritances

As to inheritances already received: "The source of the assets may be taken into account but its importance will diminish over time" [8], in the same way as pre-marital property or gifts. As to anticipated inheritances, these may be taken into account as assets, but unless the inheritance is expected shortly the uncertainties as to the testator changing their will, the value of the inheritance and the time that death will occur make the courts reluctant to take them into account [7].

Pensions

The cash equivalent transfer values of pensions are often aggregated with the values of other assets, but it is not clear that this is the correct approach (save in respect of pension lump sums), as pensions are, of course, quite different from other assets such as savings. The point is only of course relevant where there is an offsetting arrangement whereby the pension holder retains the pension (or a greater share of it), in return for the other party having a greater share of other assets.

Where a pension is already in payment it is no longer treated as a capital asset but rather as income. [9]

Business Assets

Business assets may also be treated differently from other assets, as the the party owning the business will not usually be able to realise any part of the asset without losing their livelihood, unless it is possible to draw money out of the business without adversely affecting it, or use the business to raise a loan. If the other spouse has an interest in the business then this will normally be recognised by them having a greater share of other assets.

Trust assets

If a party has an interest under a discretionary trust then this can be considered a financial resource if it is likely that the trustees would, if asked, exercise their powers in favour of that party. [10]

[1] Sir Mark Potter, P, in Charman v Charman [2007] 1 FLR 1246, [2007] EWCA Civ 503.
[2] Hardy v Hardy [1981] 1 FLR 321.
[3] Re L (Minors) (Financial Provision) (1979) 1 FLR 39.
[4] Macey v Macey (1981) 3 FLR 7
[5] Cowan v Cowan [2001] 2 FLR 192, [2001] Fam Law 498, [2001] 3 WLR 684, [2001] EWCA Civ 679, [2002] Fam 97, [2001] 2 FCR 331.
[6] S v S (Ancillary Relief After Lengthy Separation) [2006] EWHC 2339.
[7] S v S (Ancillary Relief. Importance of Financial Dispute Resolution) [2008] 1 FLR 944, [2007] EWHC 1975 (Fam).
[8] Baroness Hale in Miller v Miller [2006] 3 All ER 1, [2006] 1 FLR 1186, [2006] UKHL 24, [2006] 2 FCR 213, [2006] 1 FLR 24, [2006] 2 AC 618, [2006] 2 WLR 1283.
[9] Martin-Dye v Martin-Dye [2006] EWCA Civ 681, [2006] 1 WLR 3448.
[10] A v A [2007] 2 FLR 467, [2007] EWHC 99 (Fam).

Financial Needs, Obligations and Responsibilities

S.25(2)(b): " the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future ".

Usually referred to simply as "needs", this is often the decisive factor in determining an ancillary relief claim, especially where resources are limited. Needs will usually take precedence over other factors; for example, as already mentioned, assets acquired after the parties separate may only be distributed differently to 'matrimonial property' to the extent that they they are not required to meet the needs of the parties.

The basic needs are, of course, a sufficient income and suitable housing. The housing needs of the party with whom any children reside will take precedence, as first consideration must be given to the welfare of any child, as discussed previously. The court will endeavour to meet the housing needs of the other party, especially if staying contact is envisaged, where assets permit [1]. Where the resources are insufficient to meet the housing needs of both parties then the court may give priority to one of the parties, as occurred in Piglowska v Piglowski [2].

As has already been mentioned, a new partner's financial resources may be relevant, as they may reduce that party's needs, for example where that party shares outgoings with a new partner. On the other hand, the new partner may increase that party's needs, for example where the new partner has children for whom they do not receive maintenance.

Where appropriate, "needs" may include an element of compensation for 'relationship-generated disadvantage', for example where a wife gives up a lucrative career to bring up the family. The appropriate approach here may be to include the compensation within the quantification of the wife's needs, as 'generously assessed', rather than attempt to quantify the compensation separately.[3]

[1] M v B (Ancillary Proceedings: Lump Sum) [1998] 1 FLR 53, CA.
[2] [1999] UKHL 27; [1999] 3 All ER 632; [1999] 1 WLR 1360; [1999] 2 FCR 481; [1999] 2 FLR 763; [1999] Fam Law 617.
[3] VB v JP [2008] EWHC 112 (Fam), [2008] 2 FCR 682, [2008] 1 FLR 742.

Standard of Living

S25(2)(c): " the standard of living enjoyed by the family before the breakdown of the marriage ".

It is an inevitability that, in most cases, the parties will not be able to enjoy the same standard of living after the divorce as they did during the marriage, simply because the same resources will have to be sufficient for two households rather than one. Nevertheless, the court is obliged to consider the standard of living before the marriage broke down, and this can be highly relevant to the result, where resources permit.

Note that, since s.25 was amended by the Matrimonial and Family Proceedings Act 1984, it is no longer the duty of the court to attempt to place the parties in the financial position in which they would have been if the marriage had not broken down.

Ages of Parties and Duration of Marriage

S.25(2)(d): " the age of each party to the marriage and the duration of the marriage ".

Where the parties are young and there are no children the court is more likely to impose a clean break. Age will also have a bearing upon the ability of the parties to raise a mortgage, and the amount of mortgage that they can raise. It will also have a bearing upon the amount of pension provision that a party can accumulate for themselves. Obviously, where one or both of the parties is over retirement age this is likely to have a considerable bearing upon the settlement. Even approaching retirement age can be a factor, for example with regard to a party's ability to find work.

If the marriage is very short and childless then it may be appropriate for the court to simply return the parties to the position each was in prior to the marriage. Even if this is not appropriate (for example where considerable assets were accumulated during the marriage), the court is more likely to depart from equal division, leaving assets in the hands of the party who generated them [1]. Where there are children then the fact that the marriage was of short duration is unlikely to have much bearing.[2]

Where the marriage was a long one (a marriage that lasted ten years or more is considered to be a long marriage) then, by the same token as above, equal division is more likely to be appropriate.

Pre-marriage cohabitation is obviously not included in the duration of the marriage, but may be considered as one of the circumstances of the case under s.25(1), which was discussed under 'The General Duty'.[3]

[1] Miller v. Miller [2006] UKHL 24.
[2] See, for example, B v B [2002] EWHC 3106 (Fam).
[3] CO v CO (Ancillary Relief: Pre-marriage Cohabitation) [2004] 1 FLR 1095.

Physical or Mental Disability

S.25(2)(e): " any physical or mental disability of either of the parties to the marriage ".

This factor probably adds little to what the court must consider, as any such disability is likely to have a bearing upon that party's needs. For example, a disabled party might need extra funds to convert their home to meet the needs of their disability. Note, however, that a terminal illness could actually reduce needs, especially if life expectancy is very short – that party only needs to provide for them self for a short period of time, and the court would not be concerned about providing for the beneficiaries of their estate.

Contributions

S.25(2)(f): " the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family ".

There is a general principle of non-discrimination between the different roles assumed by each party during the marriage, as was made clear by Lord Nicholls in White v White [1]:

"In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles. Typically, a husband and wife share the activities of earning money, running their home and caring for their children. Traditionally, the husband earned the money, and the wife looked after the home and the children. This traditional division of labour is no longer the order of the day. Frequently both parents work. Sometimes it is the wife who is the money-earner, and the husband runs the home and cares for the children during the day. But whatever the division of labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party when considering paragraph (f), relating to the parties' contributions. This is implicit in the very language of paragraph (f): '. . . the contribution which each has made or is likely . . . to make to the welfare of the family, including any contribution by looking after the home or caring for the family.' If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets. There should be no bias in favour of the money-earner and against the home-maker and the child-carer."

Thus, for example, a wife's contribution by looking after the home and bringing up the children may equal her husband's financial contribution.

The courts have, however, recognised that there are occasions where one party has made a "special contribution", such that an unequal division of assets would be inappropriate, although to date this has only occurred in 'big money' cases, in relation to financial contribution. In Cowan v Cowan [2] the husband built up a substantial business fortune through his "entrepreneurial flair, inventiveness and hard work", and this was considered to be an exceptional contribution, which was reflected in the fact that he was awarded 62% of the assets.

[1] [2000] UKHL 54; [2000] 3 WLR 1571.
[2] [2001] 2 FLR 192, [2001] Fam Law 498, [2001] 3 WLR 684, [2001] EWCA Civ 679, [2002] Fam 97, [2001] 2 FCR 331.

Conduct

S.25(2)(g): " the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it ".

Conduct is often raised but, in practice, rarely has any bearing upon the settlement. To have a bearing, the conduct must be "both obvious and gross" [1], i.e. considerably more serious than the 'usual' 'misconduct' (including adultery) involved in the breakdown of many marriages.

At the top end of the scale, the husband's attempted murder of the wife in H v H [2] was clearly both "obvious and gross", and resulted in the court awarding the wife the home and the bulk of the assets. Somewhat lower on the scale was B v B [3], where the husband's conduct included child abduction, non-disclosure and removal of assets from the jurisdiction, and was still considered sufficient for the court to order the transfer of the former matrimonial home to the wife. On the other hand, in S v S [4], the husband was convicted of assaulting the wife but Mr Justice Burton found that this conduct did not have the sufficient 'gasp factor' to have a bearing upon the settlement.

[1] Wachtel v Wachtel [1973] EWCA Civ 10, [1973] Fam 72, [1973] 1 All ER 829, [1973] 2 WLR 366.
[2] H v H (Attempted Murder as Conduct) [2006] 1 FLR 990.
[3] [2002] 1 FLR 555.
[4] [2006] EWHC 2793 (Fam), [2007] 1 FLR 1496.

Loss of Benefit

S.25(2)(h): " in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit . . . which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring ".

The main such benefit is, of course, the other party's pension. Pensions accumulated during a marriage are considered to be a form of joint savings intended to benefit both parties, and to which both parties have contributed, whether directly or indirectly, in their different roles. Hence, a wife who looked after the home and brought up the children will normally be entitled to a half share of the husband's pension accumulated during the marriage.

Pension entitlement may be dealt with in one of three ways:

1. Offsetting - whereby the pension-holding spouse retains the pension and the other spouse is compensated by a greater share of the other assets;

2. A pension attachment order; and

3. A pension sharing order.

Fairness and the Sharing Principle

Although not mentioned in s.25, the concept of "fairness" has often been referred to by the courts, but what is "fairness"? Lord Nicholls in Miller v Miller [1] had this to say:

"Fairness is an elusive concept. It is an instinctive response to a given set of facts. Ultimately it is grounded in social and moral values. These values, or attitudes, can be stated. But they cannot be justified, or refuted, by any objective process of logical reasoning. Moreover, they change from one generation to the next. It is not surprising therefore that in the present context there can be different views on the requirements of fairness in any particular case."

...all of which is not particularly helpful. However, he went on to say:

"The starting point is surely not controversial. In the search for a fair outcome it is pertinent to have in mind that fairness generates obligations as well as rights. The financial provision made on divorce by one party for the other, still typically the wife, is not in the nature of largesse. It is not a case of 'taking away' from one party and 'giving' to the other property which 'belongs' to the former. The claimant is not a suppliant. Each party to a marriage is entitled to a fair share of the available property. The search is always for what are the requirements of fairness in the particular case... This element of fairness reflects the fact that to greater or lesser extent every relationship of marriage gives rise to a relationship of interdependence. The parties share the roles of money-earner, home-maker and child-carer. Mutual dependence begets mutual obligations of support. When the marriage ends fairness requires that the assets of the parties should be divided primarily so as to make provision for the parties' housing and financial needs, taking into account a wide range of matters such as the parties' ages, their future earning capacity, the family's standard of living, and any disability of either party. Most of these needs will have been generated by the marriage, but not all of them. Needs arising from age or disability are instances of the latter. In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes. The court seeks to stretch modest finite resources so far as possible to meet the parties' needs. Especially where children are involved it may be necessary to augment the available assets by having recourse to the future earnings of the money-earner, by way of an order for periodical payments."

Compensation, he said, was another 'strand' of fairness:

"This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage. For instance, the parties may have arranged their affairs in a way which has greatly advantaged the husband in terms of his earning capacity but left the wife severely handicapped so far as her own earning capacity is concerned. Then the wife suffers a double loss: a diminution in her earning capacity and the loss of a share in her husband's enhanced income. This is often the case. Although less marked than in the past, women may still suffer a disproportionate financial loss on the breakdown of a marriage because of their traditional role as home-maker and child-carer. When this is so, fairness requires that this feature should be taken into account by the court when exercising its statutory powers."

The third 'strand' of fairness, he said, is the "sharing principle":

"This 'equal sharing' principle derives from the basic concept of equality permeating a marriage as understood today. Marriage, it is often said, is a partnership of equals. In 1992 Lord Keith of Kinkel approved Lord Emslie's observation that 'husband and wife are now for all practical purposes equal partners in marriage': R v R [1992] 1 AC 599, 617 . This is now recognised widely, if not universally. The parties commit themselves to sharing their lives. They live and work together. When their partnership ends each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less. But I emphasise the qualifying phrase: 'unless there is good reason to the contrary'. The yardstick of equality is to be applied as an aid, not a rule. This principle is applicable as much to short marriages as to long marriages: see Foster v Foster [2003] EWCA Civ 565; [2003] 2 FLR 299, 305, para 19 per Hale LJ. A short marriage is no less a partnership of equals than a long marriage. The difference is that a short marriage has been less enduring. In the nature of things this will affect the quantum of the financial fruits of the partnership."

The important point to note here is that the 'yardstick of equality' (established by Lord Nicholls himself in White v White [2]) is not a rule - it is a tool against which to measure any proposed order, to determine the overall fairness of the order. In other words, it (i.e. equality) is not a starting-point - the starting-point remains the factors set out in s.25 [3]. However, where the is no good reason to depart from it, equal division is the end-point, even if it not the starting-point.

[1] [2006] 3 All ER 1, [2006] 1 FLR 1186, [2006] UKHL 24, [2006] 2 FCR 213, [2006] 1 FLR 24, [2006] 2 AC 618, [2006] 2 WLR 1283.
[2] [2001] 1 AC 596, [2000] 3 FCR 555, [2000] 2 FLR 981, [2001] 1 All ER 1, [2000] 3 WLR 1571, [2000] UKHL 54, [2001] Fam Law 12.
[3] Charman v Charman [2007] EWCA Civ 503.

Other Matters to be Considered

As is made quite clear in s.25(1), the list of factors to be considered by the court set out in sub-section (2) is not intended to be exhaustive. The court may take into account any other matter which it considers to be relevant. One such, pre-nuptial agreements, has already been mentioned. Others include:

Post-nuptial agreements

In McLeod v McLeod [1] the Privy Council held that a post-nuptial agreement was enforceable. Baroness Hale:

"Post-nuptial agreements, however, are very different from pre-nuptial agreements. The couple are now married. They have undertaken towards one another the obligations and responsibilities of the married state. A pre-nuptial agreement is no longer the price which one party may extract for his or her willingness to marry. There is nothing to stop a couple entering into contractual financial arrangements governing their life together, as this couple did as part of their 2002 agreement."

Accordingly:

"In the Board's view, therefore, the 2002 agreement was a valid and enforceable agreement, not only with respect to the arrangements made for the time when the parties were together, but also with respect to the arrangements made for them to live separately. However, the latter arrangements were subject to the court's powers of variation and the provisions which purported to oust the jurisdiction of the court, whether on divorce or during the marriage, were void."

Delay in making the application

This could have a bearing upon the settlement ordered by the court, particularly where years have elapsed since the separation and it is clear that the party applying for ancillary relief has managed, and can continue to manage, without any contribution from the other party. Having said that, there is no time bar upon making an application for ancillary relief, although it has been said [2] that it would be very difficult for a party to be allowed successfully to prosecute an ancillary relief application initiated more than six years after the date of the petition for divorce unless there was a very good reason for the delay.

CGT Implications

As indicated in Chapter 11, certain orders can have serious capital gains tax implications, and this is a factor that the court may take into account in deciding what type of order to make.

[1] [2008] UKPC 64.
[2] In Rossi v Rossi [2006] EWHC 1482 (Fam).

Factors to be considered on an application for provision for a child

These are set out in s.25(3):

"As regards the exercise of the powers of the court under section 23(1)(d), (e) or (f), (2) or (4), 24 or 24A above in relation to a child of the family, the court shall in particular have regard to the following matters-

(a) the financial needs of the child;

(b) the income, earning capacity (if any), property and other financial resources of the child;

(c) any physical or mental disability of the child;

(d) the manner in which he was being and in which the parties to the marriage expected him to be educated or trained;

(e) the considerations mentioned in relation to the parties to the marriage in paragraphs (a), (b), (c) and (e) of subsection (2) above."

However, s.25(4) goes on:

"As regards the exercise of the powers of the court under section 23(1)(d), (e) or (f), (2) or (4), 24 or 24A above against a party to a marriage in favour of a child of the family who is not the child of that party, the court shall also have regard-

(a) to whether that party assumed any responsibility for the child's maintenance, and, if so, to the extent to which, and the basis upon which, that party assumed such responsibility and to the length of time for which that party discharged such responsibility;

(b) to whether in assuming and discharging such responsibility that party did so knowing that the child was not his or her own;

(c) to the liability of any other person to maintain the child."

PROCEDURE ON ANCILLARY RELIEF APPLICATION

The Pre-Application Protocol

The Pre-Application Protocol sets out the steps which should be taken before an ancillary relief application is issued. Essentially, the Protocol is intended to ensure that a reasonable effort is made to settle before proceedings are commenced. This is done by ensuring that:

(a) Pre-application disclosure and negotiation takes place in appropriate cases.

(b) Where there is pre-application disclosure and negotiation, it is dealt with

i. Cost effectively;

ii. In line with the overriding objective of the Family Proceedings (Amendments) Rules 1999;

(c) The parties are in a position to settle the case fairly and early without litigation." (para 1.2)

The "overriding objective" is set out in r.2.51D (formerly r.2.51B) Family Proceedings Rules 1991, and is that the court must be enabled to deal with cases justly. Paragraph 1.3 goes on to warn:

"The court will be able to treat the standard set in the pre-application protocol as the normal reasonable approach to pre-application conduct. If proceedings are subsequently issued, the court will be entitled to decide whether there has been non-compliance with the protocol and, if so, whether non-compliance merits consequences."

However, the Protocol recognises that pre-application disclosure and negotiation is not always appropriate:

"solicitors should bear in mind the advantage of having a court timetable and court managed process. There is sometimes an advantage in preparing disclosure before proceedings are commenced. However solicitors should bear in mind the objective of controlling costs and in particular the costs of discovery and that the option of pre-application disclosure and negotiation has risks of excessive and uncontrolled expenditure and delay. This option should only be encouraged where both parties agree to follow this route and disclosure is not likely to be an issue or has been adequately dealt with in mediation or otherwise." (para 2.2)

And:

"Making an application to the court should not be regarded as a hostile step or a last resort, rather as a way of starting the court timetable, controlling disclosure and endeavouring to avoid the costly final hearing and the preparation for it." (para 2.4)

Although:

"an application should not be issued when a settlement is a reasonable prospect." (para 2.6)

The Protocol then sets out the steps that should be taken in appropriate cases regarding disclosure, correspondence and expert evidence. The aim of those steps is "to assist the parties to resolve their differences speedily and fairly or at least narrow the issues and, should that not be possible, to assist the Court to do so" (para 3.15).

The Application - Form A

The court has no jurisdiction to make an ancillary relief order until an application has been made [1].

Any application made by a petitioner, or by a respondent who has filed an answer claiming relief, should be made in the petition or answer, as the case may be [2]. An application which should have been made in the petition or answer may be made subsequently by leave of the court or, where the parties are agreed upon the terms of the of the proposed order, without leave by notice in Form A[3].

An application for ancillary relief which is not required to be made in the petition or answer should be made by notice in Form A [4].

Where the application is made in the petition or answer then if the petitioner or the respondent wishes to proceed with that application they must do so by notice in Form A [5].

Form A is issued by filing it with the court, together with a copy for the respondent, and the appropriate court fee.

Upon the filing of the Form A the court must fix a First Appointment date not less than 12 weeks and not more than 16 weeks after the date of the filing of the notice, give notice of that date, and serve a copy on the respondent within 4 days of the filing of the notice [6]. The court will also fix a timetable for the filing and exchange of Form Es - see the next section, and for filing and exchange of other required documentation - see the section on the First Appointment.

Where the applicant seeks a property adjustment order in relation to land, the applicant must identify the land in the Form A [7] and serve a copy of the form upon any mortgagee [8]. Where the applicant seeks a pension order, they must specify the terms of the order sought in the Form A [9] and send a copy of the form to the person responsible for the pension arrangement concerned [10].

Note that if after the grant of a decree dissolving or annulling a marriage either party to that marriage remarries or forms a civil partnership, that party shall not be entitled to apply, by reference to the grant of that decree, for a financial provision order in his or her favour, or for a property adjustment order, against the other party to that marriage [11] - this is known as the 'remarriage bar'. Subject to this, there is no time limit within which an application must be made [12].

[1] Robin v Robin (1983) 4 FLR 632.
[2] Family Proceedings Rules 1991, r.2.53(1) .
[3] Family Proceedings Rules 1991, r.2.53(2) .
[4] Family Proceedings Rules 1991, r.2.53(3) .
[5] Family Proceedings Rules 1991, r.2.61A(1).
[6] Family Proceedings Rules 1991, r.2.61A(4).
[7] Family Proceedings Rules 1991, r.2.59(2) .
[8] Family Proceedings Rules 1991, r.2.59(4) .
[9] Family Proceedings Rules 1991, r.2.61A(3).
[10] Family Proceedings Rules 1991, r.2.70(6) & (7).
[11] Matrimonial Causes Act 1973, s.28(3) .
[12] Twiname v Twiname [1991] Fam Law 520.

Form E

Rule 2.61B Family Proceedings Rules 1991 sets out the procedure on Form E:

(1) Both parties must, at the same time, exchange with each other, and each file with the court, a statement in Form E, which—

(a) is signed by the party who made the statement;

(b) is sworn to be true, and

(c) contains the information and has attached to it the documents required by that Form.

(2) Form E must be exchanged and filed not less than 35 days before the date of the first appointment.

(3) Form E must have attached to it:

(a) any documents required by Form E; and

(b) any other documents necessary to explain or clarify any of the information contained in Form E; and

(c) any documents furnished to the party producing the form by a person responsible for a pension arrangement, either following a request under rule 2.70(2) or as part of a “relevant valuation" as defined in rule 2.70(4).[1]

(4) Form E must have no documents attached to it other than the documents referred to in paragraph (3).

(5) Where a party was unavoidably prevented from sending any document required by Form E, that party must at the earliest opportunity:

(a) serve copies of that document on the other party; and

(b) file a copy of that document with the court, together with a statement explaining the failure to send it with Form E.

Form E may be found here. As will be seen, it is a substantial document and is intended to contain comprehensive details of each party's financial circumstances.

The documents that are required to be attached to the Form E include the following:

Any valuation obtained in the last six months of the matrimonial home or any other land or property, plus the latest mortgage statement,confirming the amount outstanding.

Bank and building society statements for the last 12 months, in respect of any account in which that party has had an interest during that period.

The latest statement or dividend counterfoil relating to any investments held by that party, such as shares.

Surrender valuations for any life (endowment) policies that have a surrender value – these can be obtained from the insurance companies.

The last 2 years' accounts for any business in which that party has an interest, and any document that is available to confirm the current value of that business, such as a letter from an accountant, or a formal valuation if that has been obtained.

A cash equivalent transfer valuation (CETV) in the last 12 months for each pension arrangement, or a letter of request asking for that valuation.

That party's last three payslips and most recent P60, in respect of each employment that they have.

That party's last form P11D, if they have been issued with one.

If that party is self-employed, a copy of their last tax assessment, or if that is not available, a letter from their accountant confirming their tax liability. Further, if their net income from the last financial year and the estimated income for the next twelve months is significantly different,a copy of the management accounts for the period since their last accounts.

[1] Paragraph 3(c) added by The Family Proceedings (Amendment) Rules 2000, r.8.

The First Directions Appointment

After the filing and exchange of Form Es, the parties will be required to file and exchange further documents, at least 14 days prior to the hearing of the First Appointment. These comprise:

(a) a concise statement of the issues between the parties;

(b) a chronology;

(c) a questionnaire setting out by reference to the concise statement of issues any further information and documents requested from the other party or a statement that no information and documents are required;

(d) a notice in Form G stating whether that party will be in a position at the first appointment to proceed on that occasion to a Financial Dispute Resolution appointment.[1]

The Financial Dispute Resolution appointment ('FDR') will be discussed in the next section.

The first appointment must be conducted with the objective of defining the issues and saving costs.[2]

At the first appointment the district judge—

(a) must determine—

(i) the extent to which each party's questionnaire must be answered; and

(ii) what documents requested in the questionnaire must be produced,

and give directions for the production of such further documents as may be necessary;

(b) must give directions about—

(i) the valuation of assets (including, where appropriate, the joint instruction of joint experts);

(ii) obtaining and exchanging expert evidence, if required; and

(iii) evidence to be adduced by each party and, where appropriate, about further chronologies or schedules to be filed by each party;

(c) must, unless he decides that a referral is not appropriate in the circumstances, direct that the case be referred to a FDR appointment;

(d) must, where he decides that a referral to a FDR appointment is not appropriate, direct one of the following:

(i) that a further directions appointment be fixed;

(ii) that an appointment be fixed for the making of an interim order;

(iii) that the case be fixed for final hearing and, where that direction is given, the district judge must determine the judicial level at which the case should be heard; or

(iv) that the case be adjourned for out-of-court mediation or private negotiation or, in exceptional circumstances, generally;

(e) in considering whether to make a costs order because of the conduct of a party in relation to the proceedings, must have particular regard to the extent to which each party has complied with the requirement to send documents with Form E; and

(f) may—

(i) make an interim order where an application for it has been made;

(ii) having regard to the contents of Form G filed by the parties, treat the appointment (or part of it) as a FDR appointment;

(iii) in a case where an order for ancillary relief is requested that includes a pension sharing or attachment order, direct any party with pension rights to file and serve a Pension Enquiry Form ( Form P), completed in full or in part as the court may direct.[3] A Pension Enquiry Form essentially requests from the pension provider all of the information that the court will require regarding the pension arrangement including, in particular, the pension's CETV, if this has not already been provided.

[1] Family Proceedings Rules 1991, r.2.61B(7).
[2] Family Proceedings Rules 1991, r.2.61D(1).
[3] Family Proceedings Rules 1991, r.2.61D(2), as amended.

The Financial Dispute Resolution Appointment

Not later than 7 days before the FDR appointment, the applicant must file with the court details of all offers and proposals, and responses to them.[1] (These documents, and any filed documents referring to them, must be returned to the party filing them, at the conclusion of the FDR appointment.[2])

The FDR appointment is treated 'as a meeting held for the purposes of discussion and negotiation'[3], at which the parties 'must use their best endeavours to reach agreement on the matters in issue between them'.[4]

The district judge or judge hearing the FDR appointment must have no further involvement with the application, other than to conduct any further FDR appointment or to make a consent order or a further directions order.[5]

At the conclusion of the FDR appointment, the court may make an appropriate consent order if the parties have reached agreement, but otherwise must give directions for the future course of the proceedings, including, where appropriate, the filing of evidence and fixing a final hearing date.[6]

[1] Family Proceedings Rules 1991, r.2.61E(3).
[2] Family Proceedings Rules 1991, r.2.61E(5).
[3] Family Proceedings Rules 1991, r.2.61E(1).
[4] Family Proceedings Rules 1991, r.2.61E(6).
[5] Family Proceedings Rules 1991, r.2.61E(2).
[6] Family Proceedings Rules 1991, r.2.61E(8).

The Final Hearing

Not less than 14 days before the date of the final hearing, the applicant must (unless the court directs otherwise) file with the court and serve on the respondent an open statement which sets out concise details, including the amounts involved, of the orders which he proposes to ask the court to make, and not more than 7 days after service of the statement, the respondent must file with the court and serve on the applicant an open statement which sets out concise details, including the amounts involved, of the orders which he proposes to ask the court to make.[1]

Prior to the final hearing, the applicant will be required to prepare a bundle of documents for the court, in accordance with the Practice Direction of the 27th July 2006. The bundle must include:

(a) preliminary documents comprising:

(i) an up to date summary of the background to the hearing confined to those matters which are relevant to the hearing and the management of the case and limited, if practicable, to one A4 page;

(ii) a statement of the issue or issues to be determined at the final hearing;

(iii) a position statement by each party including a summary of the order or directions sought by that party at the final hearing;

(iv) an up to date chronology;

(v) skeleton arguments, if appropriate, with copies of all authorities relied on; and

(vi) a list of essential reading for that hearing.

(b) applications and orders;

(c) statements and affidavits;

(d) experts' reports and other reports; and

(f) any other documents, divided into further sections as may be appropriate.

The bundle (with the exception of the preliminary documents if and insofar as they are not then available) must be lodged with the court not less than 2 working days before the hearing, or at such other time as may be specified by the judge. Failure to comply with any part of the practice direction may result in the judge removing the case from the list or putting the case further back in the list and may also result in a “wasted costs” order (i.e. an order that the person responsible, for example the applicant's solicitor, pay the costs that the other side have wasted as a result of the failure), or "some other adverse costs order".

The final hearing will normally be before a district judge, but the district judge may direct that the application be heard by a judge.[2] At the hearing the district judge is required to "investigate the allegations made in support of and in answer to the application, and may take evidence orally"[3], but otherwise the rules do not specify how the hearing should be conducted. After completing his investigation, the district judge is required, unsurprisingly, to "make such order as he thinks just".[4]

The general rule as to costs in ancillary relief proceedings is that the court will not make an order requiring one party to pay the costs of another party, but the court may make such an order at any stage of the proceedings where it considers it appropriate to do so because of the conduct of a party in relation to the proceedings (whether before or during them).[5] In deciding whether to make a costs order, the court must have regard to—

(a) any failure by a party to comply with these Rules, any order of the court or any practice direction which the court considers relevant;

(b) any open offer to settle made by a party (offers to settle which are not open offers are not admissible at any stage of the proceedings, except in relation to the FDR)[6];

(c) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(d) the manner in which a party has pursued or responded to the application or a particular allegation or issue;

(e) any other aspect of a party's conduct in relation to the proceedings which the court considers relevant; and

(f) the financial effect on the parties of any costs order.[7]

[1] Family Proceedings Rules 1991, r.2.69E.
[2] Family Proceedings Rules 1991, r.2.65.
[3] Family Proceedings Rules 1991, r.2.62(4).
[4] Family Proceedings Rules 1991, r.2.64(1).
[5] Family Proceedings Rules 1991, r.2.71(4).
[6] Family Proceedings Rules 1991, r.2.71(6).
[7] Family Proceedings Rules 1991, r.2.71(5).

PREVENTING AND SETTING ASIDE DISPOSITIONS

The court has three powers to prevent a respondent to a financial relief application from defeating the applicant's claim by disposing of property:

1. If it is satisfied that the respondent is, with the intention of defeating the claim, about to make any disposition or to transfer out of the jurisdiction or otherwise deal with any property, the court may make such order as it thinks fit for restraining the other party from so doing, or otherwise for protecting the claim.[1]

2. If it is satisfied that the respondent has, with that intention, made a reviewable disposition and that if the disposition were set aside financial relief or different financial relief would be granted to the applicant, the court may make an order setting aside the disposition.[2]

3. If it is satisfied, in a case where a financial relief order has been obtained by the applicant against the respondent, that the respondent has, with the intention of defeating the order, made a reviewable disposition, the court may make an order setting aside the disposition.[3]

Defeating the applicant's claim means preventing financial relief from being granted to the applicant, or to the applicant for the benefit of a child of the family, or reducing the amount of any financial relief which might be so granted, or frustrating or impeding the enforcement of any order which might be or has been made at his instance.[4]

Any disposition made by the respondent to the proceedings for financial relief (whether before or after the commencement of those proceedings) is a reviewable disposition for the purposes of paragraphs 2 and 3 above unless it was made for valuable consideration (other than marriage) to a person who, at the time of the disposition, acted in relation to it in good faith and without notice of any intention on the part of the respondent to defeat the applicant's claim for financial relief.[5]

Where an application is made with respect to a disposition which took place less than three years before the date of the application or with respect to a disposition or other dealing with property which is about to take place and the court is satisfied—

(a) in a case falling within paragraphs 1 or 2 above, that the disposition or other dealing would have the consequence, or

(b) in a case falling within paragraph 3 above, that the disposition has had the consequence,

of defeating the applicant's claim for financial relief, it shall be presumed, unless the contrary is shown, that the person who disposed of or is about to dispose of or deal with the property did so , or is about to do so, with the intention of defeating the applicant's claim for financial relief.[6]

“Disposition” does not include any provision contained in a will or codicil but, with that exception, includes any conveyance, assurance or gift of property of any description, whether made by an instrument or otherwise.[7]

"Property" includes property situated abroad.[8]

[1] Matrimonial Causes Act 1973, s.37(2)(a).
[2] Matrimonial Causes Act 1973, s.37(2)(b).
[3] Matrimonial Causes Act 1973, s.37(2)(c).
[4] Matrimonial Causes Act 1973, s.37(1).
[5] Matrimonial Causes Act 1973, s.37(4).
[6] Matrimonial Causes Act 1973, s.37(5).
[7] Matrimonial Causes Act 1973, s.37(6).
[8] Hamlin v Hamlin [1986] 1 FLR 61.

CONSENT ORDERS

Where the parties reach agreement for an ancillary relief settlement, they may apply to the court for a consent order to be drawn up, in the terms of the agreement. The purpose of an order is essentially twofold: to ensure, so far as possible, that the agreement is final (save in respect of any future variation - see the section on variation of ancillary relief orders), and to ensure that it is enforceable. Consent orders may be made at any time after decree nisi, but will not take effect until decree absolute.

On an application for a consent order the court may, unless it has reason to think that there are other circumstances into which it ought to inquire, make an order in the terms agreed on the basis only of the prescribed information furnished with the application.[1] (However, failure by either party to make full and frank disclosure during the course of negotiations leading up to the agreement may lead to the order being subsequently set aside.[2]) The prescribed information is as follows:

(a) the duration of the marriage, the age of each party and of any minor or dependent child of the family;

(b) an estimate in summary form of the approximate amount or value of the capital resources and net income of each party and of any minor child of the family;

(c) what arrangements are intended for the accommodation of each of the parties and any minor child of the family;

(d) whether either party has remarried or has any present intention to marry or to cohabit with another person;

(e) where the order includes a pension order, a statement confirming that the person responsible for the pension arrangement has been served with notice of the order, including a draft of the proposed order, and that no objection to such an order has been made by that person within 21 days from such service;

(f) where the terms of the order provide for a transfer of property, a statement confirming that any mortgagee of that property has been served with notice of the application and that no objection to such a transfer has been made by the mortgagee within 14 days from such service; and

(g) any other especially significant matters.[3]

Where the consent order simply varies a maintenance order, or is for an interim maintenance order pending final determination of the application for ancillary relief, only the information under paragraph (b) is required and. where appropriate, a statement under paragraph (e).[4]

The procedure on applying for a consent order is that the following must be filed with the court:

1. Two copies of a draft of the order in the terms sought (see below), one of which should be indorsed with a statement signed by the respondent to the application signifying his agreement.

2. A statement of information (which may be made in more than one document) which should contain the prescribed information referred to above.[5]

3. The appropriate fee.

4. Most courts also require each party to file a Form A, if they have not done so already, "for dismissal purposes only" - the point being that the court cannot dismiss claims (as most consent orders require), until those claims have been made.

Note that the court may dispense with the necessity to lodge a statement of information where both or either of the parties attend the hearing of an application for ancillary relief, e.g when agreement is reached at court.[6]

As to the form of the order, this will be in two parts: recitals and orders. Recitals may include general background to the order, agreements (which may clarify the intentions of the parties) and undertakings, for example to do anything that it is beyond the power of the court to order - breach of an undertaking is a contempt of court, and may be enforced like an order. The orders section contains those parts of the agreed settlement which may be expressed as orders.

Finally, it should be emphasised that the court is not obliged to make the order simply because the parties agree to its terms. Mr Justice Munby in L v L [7]: "...the judge is not a rubber stamp. He is entitled but is not obliged to play the detective. He is a watchdog, but he is not a bloodhound or a ferret."

[1] Matrimonial Causes Act 1973, s.33A(1).
[2] Livesey v Jenkins [1985] AC 424, [1984] UKHL 3, [1985] FLR 813.
[3] Family Proceedings Rules 1991, r.2.61(1), as amended.
[4] Family Proceedings Rules 1991, r.2.61(2), as amended.
[5] Family Proceedings Rules 1991, r.2.61(1), as amended.
[6] Family Proceedings Rules 1991, r.2.61(3).
[7] [2006] EWHC 956 (Fam).

ENFORCEMENT OF ANCILLARY RELIEF ORDERS

1. Enforcing Maintenance Orders

Because of their continuing nature, maintenance orders present special problems when it comes to enforcement. Any one of a number of methods of enforcement can be used, but for most of them the debt has to have been 'crystalised' at a fixed amount as at the time that the enforcement action is taken - the enforcement action, if successful, will require the debtor to pay that amount (plus costs and, if applicable, interest). With a maintenance order, the fixed amount will be the amount of the maintenance arrears as at the date that the enforcement action is taken. The problem, of course, will arise if the debtor continues to default on the payments after that date - further arrears will require further enforcement action. For this reason, the most appropriate way to enforce a maintenance order is by seeking an attachment of earnings order (see section 3 below), which will require the debtor's employer to deduct the maintenance payments and a sum towards any arrears from the debtor's salary. Obviously, however, attachment of earnings orders are only possible where the debtor is employed.

High Court or county court maintenance orders require the payer to make payment direct to the payee. There is therefore no court record of payments made, and the parties will need to keep records themselves, perhaps by having the payments made through a bank, rather than in cash. To get around this problem, the order may be registered in a magistrates' court[1], after which the payments are made through the court, and the court will take enforcement action (often at the request of the payee), rather than the payee - for this reason, registration is a common method of enforcement. Once an order has been registered, the magistrates' court will deal with any variation of the order. The procedure for registration is to apply to the original court to have the order registered.[2]

It should be noted that it is only possible to enforce up to 12 months worth of arrears under a maintenance order, save with the leave of the court.[3] Accordingly, any enforcement action should obviously be taken before the arrears have reached this level.

2. Enforcing Orders for Transfer or Sale of Property

It is not uncommon for a party to refuse to obey an order to transfer a property, usually the former matrimonial home, to the other party. In this case, or where the transferring party cannot be found, application may be made for an order that the conveyance or transfer be executed by a district judge instead of the transferring party.[4]

Where there is an order for sale of property, and one party refuses to cooperate with the sale by refusing to give up possession of the property, then an application may be made for an order that that party deliver up possession to the purchaser or to whomever the court directs, to allow the sale to proceed.[5]

3. General Forms of Enforcement

The following methods of enforcement (amongst others) may be used to enforce payment of money debts, particularly lump sum orders. Only brief details of the procedures will be given here, as these matters do not strictly fall within the scope of family law. For full details, consult a work on civil procedure.

Attachment of earnings - May be used to enforce payment of maintenance or a lump sum. Require the debtor's employer to make periodical deductions from the debtor's earnings and pay those sums to the collecting officer of the court.[6] The court will fix the 'normal deduction rate' and the 'protected earnings rate', i.e. the amount below which the earnings actually paid to the debtor should not be reduced, having regard to his resources and needs. Thus, if the debtor's earnings equal or fall below the protected earnings rate then no deduction will be made, and if the earnings above the protected rate are less than the normal deduction rate then only the amount by which the protected rate is exceeded will be deducted.

Judgement summons - This is a procedure whereby the debtor is required to attend court where he will be examined under oath as to his means and will have to explain why he should not be committed to prison for failure to comply with the order. In practice, any committal order is likely to be suspended on condition that the debtor pay the amount due by a specified date, or by specified instalments. For the procedure, see Family Proceedings Rules 1991, r.7.4.

Warrant of execution - Requires the court bailiff to attend the debtor's premises and seize goods to the value of the sum due. the goods will be sold and the proceeds used to pay the debt. Rarely used in family proceedings.

Charging order - An order of the court placing a charge on the debtor's property, to the value of the debt.[7] The debt is therefore secured, and can subsequently be recovered by seeking an order for the sale of the property.

Third party debt order (formerly known as a 'garnishee order') - Directs a third party who owes money to the debtor (e.g. the debtor's bank) to pay the debt directly to the creditor. For the procedure, see RSC O.49 and CCR O.30.

[1] Maintenance Orders Act 1958, s.1.
[2] Maintenance Orders Act 1958, s.2 .
[3] Matrimonial Causes Act 1973, s.32 .
[4] Supreme Court Act 1991, s.39 (in the High Court), County Courts Act 1984, s.38 (in a county court).
[5] RSC Order 31, r.1 and Family Proceedings Rules 1991, r.2.64(3) .
[6] Attachment of Earnings Act 1971, s.6(1).
[7] Charging Orders Act 1979, s.1.

APPEALS AGAINST ANCILLARY RELIEF ORDERS

If a party wishes to challenge an order of the court, then the first question to be determined is whether they wish to appeal against the order, or to have it set aside. If they are alleging that the court went wrong on the materials before it then they should appeal against the order. If, on the other hand, they are alleging that that the court went wrong because the evidence on a vital matter was concealed from the court, then they should apply to have the order set aside (in the High Court) or for a rehearing (in the county court).[1]

An appeal must be made within 14 days of the order appealed against, unless the court grants permission to appeal out of time.[2] Appeals from district judges will normally be to a circuit judge and:

(a) the appeal will be limited to a review of the decision or order of the district judge unless the judge considers that in the circumstances of the case it would be in the interests of justice to hold a rehearing;

(b) oral evidence or evidence which was not before the district judge may be admitted if in all circumstances of the case it would be in the interests of justice to do so, irrespective of whether the appeal be by way of review or rehearing.[3]

An application to set aside a High Court order is to the Court of Appeal.[4] Application for a rehearing in a county court is made by notice in the original proceedings.[5]

Appealing out of time

Where events occur within a short time after an order was made which fundamentally alter the basis upon which the order was made (known as ' Barder events'), then application can be made for leave to appeal out of time. The court may grant permission to appeal out of time, subject to certain conditions:

1. That the new events that occurred since the making of the order invalidate the basis, or fundamental assumption, from which the order was made, so that, if leave to appeal out of time were to be given, the appeal would be certain, or very likely, to succeed.

2. That the new events have occurred within a relatively short time of the order having been made. (It is extremely unlikely that this could be as much as a year, and in most cases it would be no more than a few months.)

3. That the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case.

4. That the grant of leave to appeal out of time should not prejudice third parties who have acquired, in good faith and for valuable consideration, interests in property which is the subject matter of the relevant order.[6]

Note that this would not be a conventional appeal out of time, as it could not be said that the original decision was wrong when it was made.

Consent orders

Appealing against a consent order is a logical impossibility. However, a consent order can be set aside (if made in the High Court) or subject to a rehearing, if made in a county court. A consent order may also be challenged on the basis of a Barder event.

[1] Per Lord Merriman P in Peek v Peek [1948] P 46 at 60.
[2] Family Proceedings Rules 1991, r.8.1(4).
[3] Family Proceedings Rules 1991, r.8.1(3).
[4] Supreme Court Act 1981, s.17(1).
[5] CCR Ord 37, r.1.
[6] Barder v Barder (Caluori Intervening) [1988] AC 20, 2 FLR 480.

VARIATION OF ANCILLARY RELIEF ORDERS

The court has power to vary ancillary relief orders under s.31 Matrimonial Causes Act 1973. However, the power is limited to the following types of order:[1]

(a) any order for maintenance pending suit and any interim order for maintenance;

(b) any periodical payments order;

(c) any secured periodical payments order;

(d) any order for payment of a lump sum by instalments;

(e) a pension attachment order;

(f) any order for a settlement of property or for a variation of settlement, being an order made on or after the grant of a decree of judicial separation.

(g) any order for the sale of property;

(h) a pension sharing order which is made at a time before the decree has been made absolute (only if, at the time when the application is made, the decree has not been made absolute[2]).

In exercising its powers to vary orders the court shall have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen, and the circumstances of the case shall include any change in any of the matters to which the court was required to have regard when making the order to which the application relates, and—

(a) in the case of a periodical payments or secured periodical payments order made on or after the grant of a decree of divorce or nullity of marriage, the court shall consider whether in all the circumstances and after having regard to any such change it would be appropriate to vary the order so that payments under the order are required to be made or secured only for such further period as will in the opinion of the court be sufficient (in the light of any proposed exercise by the court, where the marriage has been dissolved, of its powers to make a further capital order - see below) to enable the party in whose favour the order was made to adjust without undue hardship to the termination of those payments;

(b) in a case where the party against whom the order was made has died, the circumstances of the case shall also include the changed circumstances resulting from his or her death.[3]

If the court decides to exercise its powers then it may vary the order, discharge it, suspend any provision of the order temporarily or revive the operation of any provision so suspended.[4] It may also, if either party applies for a clean break, discharge the order and replace it with a lump sum order, property adjustment order or pension sharing order.[5]

[1] Matrimonial Causes Act 1973, s.31(2).
[2] Matrimonial Causes Act 1973, s.31(4A).
[3] Matrimonial Causes Act 1973, s.31(7).
[4] Matrimonial Causes Act 1973, s.31(1).
[5] Matrimonial Causes Act 1973, s.31(7B).

AN INTRODUCTION TO FAMILY LAW Chapter 4 - ANCILLARY RELIEF ANCILLARY RELIEF ORDERS

Procedure

AN INTRODUCTION TO FAMILY LAW

Chapter 4 - ANCILLARY RELIEF

ANCILLARY RELIEF ORDERS