Short Marriages – More Clarity?

Most experienced family law practitioners know that White v White introduced the ‘sharing principle’ where as a general guide, an equal division of assets between husband and wife should be departed from only if there is good reason for doing so.

Often there is an argument used by the asset holding party that they have made a “special contribution” or such like and the courts in the main have been unimpressed by those arguments save where those contributions have been “exceptional”.

It would seem therefore that we are doomed to just lay down and accept the sharing principle in all but the most exceptional of cases. However recently in Sharp v Sharp [2017] EWCA Civ 408  the court did depart from the principle of sharing and the wife was successful in reducing the capital sum awarded to the husband in a short marriage with no children.

The basic facts are that the parties earned similar incomes of circa £100,000 per annum but they the wife went on to earn substantial bonuses of over £10 million during the marriage whilst the husband earned very trivial bonuses.

At first instance, applying the sharing principle Sir Peter Singer found that there was no sufficient reason identified for departing from equality of the division of the assets and awarded the husband £2.7 million. Broadly speaking half the matrimonial pot.

The wife appealed.

 

Decision of the Court of Appeal
McFarlane LJ held:

1. The notion that the sharing principle applied unless the parties had entered into a prenuptial agreement was “unsustainable and not supported by any authority”.

2. The opinion of the majority in Miller was that the law should entertain the possibility for departure from equal sharing where there are unilateral assets in a short marriage and it was dual-income case.

3. The obiter comments in Charman, preferring the approach of Lord Nicholls, was not a determinative statement of the law.

4. The manner in which the parties arranged their finances was more than sufficient to establish that the wife maintained her capital separately, in a manner compatible with that described by Baroness Hale in Miller.

The wife’s appeal was allowed.

The husband’s claim was therefore limited to £2 million calculated as follows:

(a) £1.3m being a 50% share of the aggregate value of the parties’ two properties, which were held in joint names; and

(b) £700,000 to reflect three factors: (i) the standard of living enjoyed during the marriage; (ii) the need for a modest capital fund to live in the property the husband was to retain; and (iii) some share in the assets held by the wife.

The main crux therefore seems to me that the income and approach to spending was to delineate expenditure but equally importantly, that the marriage was short.

One question that remains unanswered is: how is a ‘short’ marriage defined?

We shall have to wait and see.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitor before decisions are made and before you embark on a certain course of action.

Shak Inayat
Solicitor

Penn Chambers Solicitors
0207 183 2898

 

Foreign Pensions on Divorce

Goyal v Goyal [2016] EWHC 50 (Fam)

It is well established in the family courts that ‘The court is able to make a pension sharing order against a foreign pension. Whether or not it will exercise its jurisdiction to do so will depend upon the reaction of the pension scheme when served with the application (Pension Schemes (Application of UK Provisions to Relevant Non-UK Schemes) Regulations 2006, SI 2006/207, as amended.

District Judge Brasse at first instance in relation to an Indian pension made an order following that established view and made declarations as to the beneficial ownership of that foreign pension fund and directed the husband to transfer to the wife his interest in that fund based on the facts of the case.

The case was appealed and came to be reheard by Mr Justice Mostyn in the Court of Appeal.

The husband argued that even if the fund is beneficially owned by him, the wife’s claim for a pension sharing order should still be dismissed for two reasons:

i) An order for pension sharing under section 24B Matrimonial Causes Act 1973 cannot be made in respect of an overseas pension; and/or

ii) The wife had adduced no evidence that such an order, were it to be made, would be enforced by the courts in India.

Mostyn J’s judgment gives detailed consideration of the provisions relating to pension sharing on divorce. The key issue for Mostyn J, however, was the basic rule of statutory interpretation which is set out in Bennion on Statutory Interpretation (6th edition), LexisNexis 2013, which states: ‘Although an enactment may be expressed in general terms, the area for which it is law (known as its extent) must exclude territories over which parliament lacks jurisdiction.’

However, Mostyn J pointed out that just because the court does not have powers over a foreign pension scheme, that does not mean there are no other routes to achieving direct sharing of a foreign pension. An alternative method is an agreement, backed by undertakings, to obtain an order in a foreign jurisdiction to split a pension in that foreign country. Prior to approving such technique, the court must be satisfied that the foreign pension provider will give effect to the deal.

Turning to the husband’s second argument, Mr Justice Mostyn accepted that the wife had not filed any evidence that a pension sharing order would be likely to be enforced in India. It was well established that a property adjustment order can in principle be made in respect of property sited overseas provided there is clear evidence that such an order would be implemented in the overseas jurisdiction. However, here, the wife did not file any evidence to confirm that a pension sharing order would be reciprocally enforced in India.

As such, the wife’s claim for a pension sharing order failed.

Oral Agreement ? Beware

Ely v Robson [2016] EWCA Civ 774

This was an appeal under the Trusts of Land and Appointment of Trustees Act 1996 by Ms Robson, against an order declaring that Mr Ely her former partner held a property in Poole in Dorset on trust, 20% as to her share and 80% as to his share after an oral agreement reached in a car park.

The parties were in a relationship when they bough the property but purchased it in the sole name of Mr Ely with the assistance of a mortgage. Ms Robson made no contribution to the purchase. The parties moved in and had two daughters together. Ms Robson’s aunt, Vera Ellis moved into the property and from time to time, her elderly mother, Peggy Robson, came to stay.

Once the relationship broke down, Mr Ely asked Ms Robson to move out and issued a claim for possession of the property and Ms Robson defended that claim and counterclaimed that she owned 50% of the property held on trust equally for both.

Mr Ely said that an agreement had been reached in a car park of all places with no slolicitors present. Ms Robson said that was not the case and that she would never have settled for anything less than 50% in any event.

A later solicitors letter from Mr Ely’s solicitors stated:

a) Mr Ely would hold the property on trust for himself for life, with a remainder of 80% to his heirs and assigns and 20% to Ms Robson;

b) that Ms Robson would have the right to occupy the property for as long as either Vera Ellis or Peggy Robson were alive;

c) that after that Mr Ely could sell the property if he so wished.

After Mrs Ellis and Mrs Peggy Robson died, on 24 July 2014, Mr Ely issued a claim for declaratory relief as to the parties shares in the equity in the property and and sought an order for sale on the basis of the 14 August 2007 agreement.

Ms Robson’s defence was that it was the common intention of the parties that they should own 6 Torbay Road in equal shares as their family home from the outset and that she contributed to the costs and expenses of the family once she moved in. She sought a declaration that Mr Ely owned 6 Torbay Road on trust for them both in equal shares.

The judge stated at trial that there was a negotiated settlement and what remained was simply a matter of mechanics to achieve their clearly stated objectives about their interests. He also found that Mr Ely was led to believe that Ms Robson agreed to those objectives and on that basis, did not pursue his claims for a declaration that she had no interest in the home.

Ms Robson appealed to the Court of Appeal which supported the first judges decision and that the judge was entitled to find that the parties intended that their oral agreement, which was sufficiently certain, be binding upon them. Accordingly, the court found that Mr Ely held the property on constructive trust for the parties in 80/20 shares.

Let that serve as a warning. Do not enter into agreements recklessly.

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitor before decisions are made and before you embark on a certain course of action.

 

Shak Inayat
Solicitor
0207 183 2898

 

Post Script – see later case of Saranovic v Saranovic for interesting parallels

What’s In A Child’s Name?

Is it one rule for us and another rule for the rich and famous?

 

A Court of Appeal has recently upheld an order made in the Swansea Court where a mother was prevented from naming her twins “Cyanide” and “Preacher”.

 

On first reading, it seems quite logical that one ought to think very carefully about naming their children that way, especially with the taunts and jibes that they may receive in the playground.  It has not escaped my notice, certainly, that a recent report indicated that 50% of children are bullied in school. Whether that is right or not is another matter.  However, calling your children Cyanide or Preacher is not going to help things, that’s for sure.  The case concerned C (Children [2016] EWCA CIV364) where the Court had to determine whether there was a power in the jurisdiction of England and Wales to prevent a parent who has parent responsibility from registering a child with a forename of their own personal choice and, if not, by which procedural route the Court should exercise their power to prevent the child’s name from being so registered.

 

It is also worthy of note that, in this case, the mother had a long standing diagnosis of mental illness and her parenting skills were impaired further by drug and other substance misuse.

 

At the first instance, the Judge declared that the local authority were permitted to stop the mother from exercising her parental responsibility in such a way that she would not be able to register the children’s forenames of Cyanide and Preacher.  On appeal, Lady Justice King stated that she also came to the conclusion that there are a small category of cases where the Court ought to intervene in a specific set of circumstances to curtail the parental responsibility of a parent where the impact of that is so profound when will have such a significant impact on the child that it would be right to do so despite Article 8 of the European Convention of Human Rights.

 

For the sake of completeness, the European Convention of Human Rights relates to the right to family life without inappropriate interference by the State.

 

It seems to me, on first reading of that, that it makes sense.  However, looked at against the backstop of how celebrities name their children and how we almost consider them, in some cases, to have “trendy” names or just simply tolerate the fact that they have changed the child’s name and because they are rich and famous it is acceptable for them to do so, but yet not acceptable for a mother with mental health issues to do the same.

 

Admittedly, Cyanide and Preacher are not names that I would wish to call my children.

 

But neither would I wish to call my children Kal-L, who is one of the children of Nicholas Cage, none other than, nor would I wish to call my name Pilot Inspektor, who is the child of Jason Lee, nor would I wish to call my child Moxie Crimefighter, who is the child of Penn Jillette and, in particular, I would certainly not wish to call my child Zuma Nesta Rock, who is the child of Gwen Stefani.

 

There are a litany of other such ridiculous names but ridiculous only to me and perhaps to many others but not, presumably, ridiculous to the parents who so chose those names.

 

So do we allow a mother with mental health issues to choose names for her children, not dissimilar to what some may see as being ridiculous names for the rich or famous or do we interfere in those rights to have an overarching moral and other responsibility to protect them from harm in the long term.

 

On balance, I would suggest that it is probably right to interfere under the circumstances, in my personal view (not my professional view). I am sure people who like the names of Fifi Trixibell (a child of Bob Geldof) or of Jermajesty, the child of Jermaine Jackson, may not be inclined to agree.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitor before decisions are made and before you embark on a certain course of action.

 

Shak Inayat
Solicitor
0207 183 2898

Should I Consider A DIY Divorce?

Deciding to end your marriage and get a divorce is extremely difficult, and this can be made even more difficult because of the financial impact of a divorce. The costs involved in using a solicitor can feel overwhelming and can often mean couples stay together longer due the financial constraints of divorce. The other alternative to staying together is a DIY divorce.

This involves completing the process with little or no help from a solicitor.

For many people this seems an attractive option but there are some points you should take into account before deciding if this is the right route for you.

The first and most important consideration when getting divorced is the financial split, particularly if you have been a stay at home parent, whilst your spouse has been out at work. This situation would result in you having limited earning power and probably no pension. If you were to divorce on a DIY basis, you may find that you don’t receive a fair settlement for the role you have taken in the family. Whilst the divorce is not about the money, it is about ensuring that you both leave the marriage with a share that is fair.

A DIY divorce may not be for you if your relationship has become acrimonious prior to your divorce. This is because you will not have any third parties involved and you will have to reach agreement on a number of issues such as access to the children, the sale of the house, where the children should live and many other issues.

You may decide that you would like to do some of the divorce yourself, such as completing the divorce petition and filing it with the court, but it is important to recognise the issues which you may need specialist help and advice for.

You should also be aware that this is the process in England and Wales. If you are based in Scotland or Northern Ireland the law is different and you should seek advice from an experienced solicitor in your area.

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitors before decisions are made and before you embark on a certain course of action.

Shak Inayat

Solicitor

0207 183 2898

The New Cost Of Divorce

The government are planning a rise in the fees you pay to get a divorce and this may have a real impact on people who are stuck in unhappy marriages. Senior family court judges are concerned that women will be particularly affected by this new increase in fees. They commented recently that ‘there is something unappetising about the state making a profit on a legal necessity and a source of unhappiness for people’.

Whilst the judiciary are unhappy about this new rise, what are the facts and who will it affect the most?

The plans, that are now the subject of a Common’s Justice Committee Enquiry, are to increase costs by 34 per cent – in real terms this is a rise from £410 to £550. This is the latest in a long line of increases in the cost of divorce. In fact, the cost for a couple getting a divorce has actually gone up by 600 per cent in only two years. This is as a result of the current government pushing the burden from the taxpayer to the individuals involved.

However, the government have not only increased the fees to ensure they cover the cost of the service, they are actually making a profit on divorce – they will take over £66 million in profit each year from unhappy couples and put this towards maintaining the court system.

Whilst for many people £550 to get out of an unhappy marriage may be a price worth paying, it may put a number of people at a real disadvantage and leave them in a position where these fees create a very real barrier to leaving their marriage.

Senior judges, both from the Judicial Executive Board and from the High Court, suggest that people are being encouraged to stay in bad marriages due to financial constraints. The impact on them and on their children could be devastating. They also claim that this goes against one of the fundamentals of British justice – that access to justice should not be sold – everyone should have access regardless of their means. In addition, they fail to understand why people who wish to get divorced should subside the court system.

Speaking of the system; whilst costs are increasing, are divorcing couples able to count on the Court, who pays for its administration and existence, getting a good service? Many practitioners, myself included, would say not. Indeed, many would agree that the system takes much to be desired with how the application is processed, delays in getting matters listed, even for urgent applications, and the list goes on.

It seems this issue will continue to be debated for some time.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitors before decisions are made and before you embark on a certain course of action.

 

Shak Inayat
Solicitors
0207 183 2898

Financial Settlements and Divorce

When your marriage has broken down your first thought might often be about how you will cope financially with the break up. Interestingly, you do not need to agree a financial settlement during your divorce. You can do this at any time before or afterwards although there are some very good reasons why you should do this during your divorce.

 

Firstly, don’t be concerned that the reason for your divorce will adversely affect your financial settlement as this usually only happens where serious and impactful behaviour takes place. Although this does not affect the financial settlement aspect of your divorce, it will potentially affect your access to your children and may mean that you will not be the main carer.

 

Secondly, any financial settlement in a divorce is based on a number of different factors that will be taken into account by the judge making the order. He will consider:

 

  • Your earnings and your ex-spouse’s earnings, both of your needs and also both your assets

 

  • What your standard of living was before your marriage broke down

 

  • The length of your marriage and your age

 

  • What contribution your ex-spouse and you made to the marriage, such as looking after the home and the children

 

You can see therefore why each case is different and why the family courts are allowed discretion in making financial awards as the outcomes are not usually straightforward.

 

You should also factor into any financial settlement items such as your pensions. This element can easily be forgotten and could be a large sum of money. You can also ask for a life insurance policy on your ex-spouse to protect you and your children in case he or she dies and therefore any maintenance payments would stop. You can negotiate this insurance payment as part of your financial settlement.

 

Once the court has ordered your spouse to pay maintenance, they must do so. If they don’t, you can go back to the court and ask for an order to make them pay the necessary money. This is usually done with an attachment of earnings order, where your ex-spouse’s employer pays you directly.

 

In addition, if your ex-spouse is also paying child maintenance and stops paying, you should get legal advice as soon as possible.

 

This information provided in this article is not intended to constitute legal advice and each relationship breakdown requires careful consideration in our view by a fully qualified Solicitors before decisions are made and before you embark on a certain course of action.

 

Shak Inayat

Solicitor

0207 183 2898

Pension Earmarking Order – More Trouble Ahead?

In 1995*(1) a new animal was created in the world of ancillary relief (that is the financial aspects of a divorce) when dealing with the distribution of pension assets – a pension earmarking order. Prior to that, in reality the only effective alternative when trying to fairly share the assets of a divorcing couple was to offset a pension fund against other assets, say a lump sum or a property. That was not always a feasible option.

No lawyer that I came across seemed to like pension earmarking orders.

I know I was concerned about how difficult they were to draft and also ensure that they were future proof. I avoided them like the plague as did many of my professional brethren – and it seems that instinct was right all those years ago.

Clearly with the advent of pension sharing orders, courtesy of the 1999 Act*(2), pension earmarking orders fell out of fashion and we all breathed a collective sigh of relief. There are however, still circumstances (such events are rapidly dwindling I accept) where earmarking orders may need to be made – but that is another story for another day.

The changes implemented by Gideon Osborne in April 2015*(3) allowed for persons over 55 to raid their own pensions (as opposed to the companies raiding them for a change!) rather than buying an annuity and there has been much hype in the media about pensioners buying Lamborghinis and then living in penury for the rest of their lives.

If you have an earmarking order, then there is a risk that the person with the pension can effectively raid the pension, take off with the wads of cash and you as the poor ex spouse left high and dry with a reduced pension in payment.

Time to check the wording of your final (financial remedy) order if you have an pension earmarking order as part of your financial remedy (ancillary relief) proceedings?

Shak

*(1) Introduced under section 166 of the Pensions Act 1995, which inserted sections 25B to 25D of the Matrimonial Causes Act 1973. Earmarking of pensions extended the armoury of the court to allow them to earmark a pensioners (a members) pension rights for the benefit of the former spouse and has applied since 1 July 1996.

*(2) The Welfare Reform and Pensions Act 1999 (WRPA) further amended The Matrimonial Causes Act 1973 by sections 19 and 21 of the WRPA  introducing pension sharing (as well as making some improvements to earmarking). The WRPA received Royal Assent on 11 November 1999 and became a legally enforceable settlement from the 1 December 2000.

*(3) pdf of government document highlighting the changes> warning> very dull reading ! can be found here.