#1799 - Miller - Family Law

Miller; McFarlane [2006] UKHL 24

House of Lords

Facts

In Miller, H had been a successful fund manager. When he got married, he negotiated a move and was very successful, vastly increasing his wealth. After three years the marriage broke down and W claimed ancillary relief.

In McFarlane, both H and W had lucrative careers until they agreed W would give up to look after children. They later divorced and W applied for ancillary relief.

Held Lord Nicholls

• The requirements of fairness

  • 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 which can be stated, but they cannot be justified, or refuted, by any objective process of logical reasoning.

    • It is not surprising therefore that in the present context there can be different views on the requirements of fairness in any particular

  • Implicitly the courts must exercise their powers so as to achieve an outcome which is fair between the parties.

    • But an important aspect of fairness is that like cases should be treated alike. So if there is to be an acceptable degree of consistency of decision from one case to the next,

      • the courts must themselves articulate, if only in the broadest fashion, what are the applicable if unspoken principles guiding the court's approach

• Where do we go?

  • 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.

    • 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

  • The statute provides that first consideration shall be given to the welfare of the children of the marriage.

    • Beyond this several elements, or strands, are readily discernible.

• The first is financial needs.

  • Marriage gives rise to interdependence – when marriage ends, we should try to divide fairly to satisfy 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

• Another strand, recognised more explicitly now than formerly, is compensation

  • This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage.

    • Suppose the parties have said that W be the carer and H the earner, and this has vastly increased H’s earnings.

    • 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.

      • When this is so, fairness requires that this feature should be taken into account by the court when exercising its statutory powers

  • Compensation and financial needs often overlap in practice, so double-counting has to be avoided.

    • But they are distinct concepts, and they are far from coterminous. A claimant wife may be able to earn her own living but she may still be entitled to a measure of compensation

• A third strand is sharing. This “equal sharing” principle derives from the basic concept of equality permeating a marriage as understood today

  • It is wrong to say that this can only occur in long marriages and not short ones.

    • on the breakdown of a short marriage the money-earner would have a head start over the home-maker and child-carer

Held Baroness Hale

• There is much to be said for the flexibility and sensitivity of the English law of ancillary relief.

  • It avoids the straitjacket of rigid rules which can apply harshly or unfairly in an individual case.

  • But it should not be too flexible. It must try to achieve some consistency and predictability

• Although the 1973 Act, as amended in 1984, contains no express objective for the court, it does contain some pointers towards the correct approach.

  • First, the court is directed to give first priority to the welfare while a minor of any child of the family who has not attained the age of 18

    • although the couple may seek to go their separate ways, they are still jointly responsible for the welfare of their children

  • Secondly, the checklist in s.25(2) is not simply concerned with totting up the present assets and dividing them in whatever way seems fair at that time.

    • The court is still concerned with the foreseeable (and on occasions more distant) future as well as with the past and the present

  • Thirdly, several provisions were inserted in 1984 to encourage and enable a clean break settlement, in which the parties could go their separate ways without making further financial claims upon the other

• These three pointers do make it clear that a clean break is not to be achieved at the expense of a fair result.

  • But the Act still leaves us without much help towards what the court should be trying to achieve by its reallocation of their resources and why it should be doing so

  • White v White established the principles of fairness and non-discrimination and the “yardstick of equality”.

    • But the House was careful to point out that the yardstick of equality did not inevitably mean equality of result.

    • It was a standard against which the outcome of the s.25 exercise was to be checked

• What is the rationale for re-distribution?

  • The most common rationale is that the relationship has generated needs which it is right that the other party should meet.

    • Often the court is trying to ensure that each party and their children have enough to supply their needs,

      • set at a level as close as possible to the standard of living which they enjoyed during the marriage

    • Another source of need is having had to look after children or other family members in the past.

      • Many parents have seriously compromised their ability to attain self-sufficiency as a result of past family responsibilities.

        • Even if they re-enter employment, it will often be at a lower level.

    • While need is often a sound rationale, it should not be seen as a limiting principle if other rationales apply.

      • Before White Need had become “reasonable requirements” and thus more generous to the recipient,

        • but it was still a limiting factor even where there was a substantial surplus of resources over needs

  • A second rationale, which is closely related to need, is compensation for relationship-generated disadvantage

    • Indeed, some consider that provision for need is compensation for relationship-generated disadvantage.

      • But the economic disadvantage generated by the relationship may go beyond need, however generously interpreted

  • A third rationale is the...