Ancillary relief: principles

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Courts general guidance

There are a considerable amount of factors to take into account. HoL provided some general guidance on how this should be applied. 

White v White- they said the objective must be a fair outcome and powers should be exercised with this in mind, first considering children. They produced the non discrimination principle indicating that between husband and wife there should be no discrimination between them and their respective roles. Equality should only be departed from if theres a good reason for doing so. Need to justify it. On the issue of inherited property bought into the marriage by one spouse, the owning spouse shall be permitted to keep it. Should assess the nature and value of the property, and the time and when and circumstances in which it was acquired. However, this carries little weight. 

This decision got a mixed reception. 

Miller, McFarlane- two different couples with different situations. The HoL gave general guidance. Lord Nicholls made clear that the principles in White were applicable to all marriages. However he said the removal of the needs based approach meant more judicial principle was needed. He set out the three underlying rationales for fairness. 

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Courts general guidance

  • 1) the needs of the parties- reflecting their interdependence. Most cases will end here. 
  • 2) compensation- aimed at addressing any significant prospective economic disparity due to the manner in which the marriage was conducted.
  • 3) sharing- the idea of marriage as a partnership of equals from the outset means that 'each spouse is entitled to an equal share of the assets of the partnership unless there is a good reason to the contrary.' This applies to short marriages as well as long ones. Must have regard to all property but need not treat it all the same. Said that in a short marriage, fairness may require that the claimant not be entitled to a share of the others non maritial property. The source of the asset may be a good reason for departing from equality. The way they organise financial affairs also matters. PPO is not just for maintenance and can be compensation as well. The desirability of the clean break should be a sufficient reason for depriving the claimant of compensation. 

Lady Hale- she reflected what he said. She made a distinction between family and business assets. Business assets generated solely or mainly from one party are not to be treated as family assets. The distinction is founded on the basis that there is no obvious causal connection between the home making contributions of the primary carer and these assets. 

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Courts general guidance

The ethos of the guiding principle in White (non discrimination and the yardstick of equal division) have now been incorporated within the three bases of wealth distribution- needs, compensation and equal sharing. 

The bases of financial provision orders following Miller McFarlane-

Needs- where the parties have few assets their financial circumstances will dictate the outcome, as the assessment of the parties needs will 'lean heavily in favour of the children and the parent with whom they live.' Parties needs will determine most of it. Where assets are beyond their financial needs, policy questions come into play.

Compensation- should not be assumed that a compensatory award will routinely be made.

  • VB v JP- held that while the wife clearly suffered loss of earning potential as a result of the marriage and was entitled to compensation, this was hard to quantify. Thus he held it was not necessary to quantify compensation separately. Instead it was considered as part of the wife's needs assessed against the standard of living in the marriage and the husbands increased income.
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Courts general guidance

  • SA v PA- very critical of compensation. Wife claimed she had given up high powered career and so her PPO should be increased to account for this. Judge could not see how free choice to give up work could be characterised as loss suffered. Compensation was also highly speculative. He said there were 4 principles guiding compensation- 1) only rare and exceptional case where it is successfully invoked 2) such a case will be one where the court can say with near certainty that the claimant gave up a high earning career which had it not foregone would have led to earnings at least equivalent to the respondent. 3) such a high earning career would have been practiced by the claimant over an appreciable period of the marriage and 4) once these findings have been made, compensation will be reflected by fixing the PPO awards near the top end of the discretionary bracket applicable for needs assessment. Should not be reflected in additional element on top of needs based awards. Present case didnt allow for compensation as the wife had no appreciable track record adn it was not known what her earnings were.
  • H v H- said there are cases where the needs argument doesnt do full justice. Husband wanted PPO terminated by wife said should pay lump sum for clean break and to compensate for her career sacrafices. Judge held there was a compensation element. Husband had to make lump sum payment on retirement. 
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Courts general guidance

Seems therefore that the compensation principle where one party has suffered tangible economic loss due to sacrificing career to look after children remains part of the law.

Equal sharing principle- means that when the marriage partnership ends each spouse is 'entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary.' This came from White. On the principle of White and Miller, the function of financial provision orders is to 'determine the parties unascertained shares in the pool of assets that is the fruit of the marital partnership.' There is now a much stronger presumption of asset sharing on divorce, based on marriage as a collaborative partnership.

Is equal sharing an end of assessment yardstick or starting point? Miller said it was regarded as a starting point once assets have been established, which means court will assume equal division unless there is good reason to depart from it. This was confirmed in Charman. 

Two parts of making an order- 1) deciding which assets are available to the parties and 2) how they should be distributed.

Jones v Jones- spouses earning capacity is not to be capitalised or brought into account for the purposes of the sharing principle. 

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