#17062 - Family Finance - Family Law

Homelessness (Matrimonial Home)

• Registered matrimonial home right immediately (s.30 FLA 1996)- home right notice no need consent- right for spouses, but only applicable on former or current matrimonial home (only one)

• S.24 Property adjustment orders e.g. apply out for outright transfer or Mesher

• Joint tenants- no need to register rights, automatic right (advise severing tenancy due to survivorship)

• Prevent getting decree absolute before sorting out financial

• Registration- Do index map search: Unreg: Class F land charge/ Reg land: Agreed notice

Sale of business

• Injunction order (s.37.2(a) MCA)-: show other party about to make decision to defeat financial claims

• Make application of financial relief (proceedings started when ticked box in divorce petition)

• Apply for an injunction to prevent sale BUT must have started proceedings under MCA

  • About to make

  • A disposition of property

  • Intention of defeating the claim

  • Rebuttable presumption that the other party intends to jeopardise her claims

Sale of Rental Home

• S.37.2(b) apply to situation where sale already happen- to set aside and undo it

• Apply for an injunction to set aside sale under s.37.2(b) MCA BUT must have started proceedings under MCA

  • Is it a reviewable transaction (not to a bona fide purchaser with valuable consideration)?

  • Intention of defeating the claim

  • Presumption of malevolent intended sale with last 3 years and will jeopardise the claim within financial proceedings

Action:

• Register s.30 right

• Petition for divorce (tick all financial orders in prayer for her and children)

• Activate application for financial orders under s23 and 24 by filing Form A

• Consider applying for s.37 injunctions or seek undertaking from other party

CMS calculation -No clean break between child and parent

• Gross annual income

• Deduct pension

• Weekly gross income

• Other children?

• Basic rate for e.g. two children (apply 16% rate up to GBP800 and 12% rate to balance)

• Do the calculation

• Shared care?

GBP50,000 p.a.- GBP961.5 per week

GBP800 x 16%= GBP128

GBP161.5 x 12%= GBP19.38

128+19.38= 147.38

Shared Care: 2 nights per week: 147.38 x 2/7= 42.1-> 147.38- 42.1= 105.28

How big is the pie? –Capital and Income (Net equity)

Yardstick= GBP80,000

s.25.1(a)

Yardstick of Equality (capital assets only)= Half portion of net assets

Possible options for the house?

• Sale and split

• Outright transfer

• Deferred trust eg Mesher- Court will decide % share if parties can’t agree

Income

(Ignores voluntary maintenance)

Effect of H’s offer on capital

• H has GBP100,000 (60,000 + 25,000 + 15,000)= 62.5% capital of the GBP160,000 total pie

• W has GBP60,000= 37.5% capital

• (After sale costs)

Effect of H’s offer on income

• No maintenance

• H has GBP548.77 per week

• W has GBP299.18 per week

• Where would W and children live?

• How would they manage?

Why is the offer not acceptable?

• S.25(1)

• S.25(a)

• S.25(2)

  • Income

  • Needs

  • Standard of life

  • Disability

  • Contributions

  • Conduct

  • Case of proceedings

• S.25(3) Child

  • Financial needs

  • Income

  • Disability

  • Education

  • Other consideration

• Clean break

Fairness?

CHILDREN are first consideration *get everyone housed

Counter-offer

• Apply the s.25 factors using the s.25 approach

• Formulate a counter offer:

  • Suggestion for the house

    • Sale and split

    • Transfer (Transfer house and H keeps all other capital)

    • Mesher (Triggers ie. death, remarriage, child turn 18/ finish full time education- Sale and split to attain fairness)

  • Percentage of the capital pie

  • Maintenance/ mortgage (Spouse maintenance until able to get back to work field)

  • Fairness

W’s potential counter offer

• Children’s needs are the first consideration

• Mesher trust with at least 2/3rds equity to W

  • W has 80/120k when Mesher ends= 50% pie

  • H has 40k now (i.e. 25k + 15k) and 40k when Mesher ends= 50% pie

• Term maintenance of at least GBP200 per week (need instructions on period necessary or retaining)

• Fair? And each party to bear own interests

S25 Approach

1. SET OUT S25(1) principles

   • Must have a/c of all circumstances

   • Children are the first consideration (APPLY)

2. SET OUT S25A clean break principle

3. STATE approximate figure for Yardstick of Equality

4. APPLY your fact scenario to EACH of the S25(2) factors in order

   • For example: Resources: including income, housing, capital, earning capacity etc.

5. STATE whether one or more of the factors indicates that there is a reason to depart from the Yardstick of Equality to produce a fair result

6. CONCLUDE- how you would redistribute capital and income to produce a fair result on the facts

For example:

W should have X capital and Y income (is there need for spousal maintenance necessary? If so, for how long?)

H should have A capital and B income (again consider if he need spousal maintenance etc)

1. Pension

2. Have you achieved Yardstick of Equality? If not, can you justify it?

Income

• This size of Mortgage + House affect a party’s outgoings. Re-call based on your capital proposal

• Is there a shortfall for 1 party? If so:

  • Argue should cut basics?

  • Spousal Maintenance?

  • Both?

AGREED capital split for Mr P

1. Lump sum after sale 205,000

2. Shares 35,000

240,000

240k (385k x 100= 62% realisable pie)

3. Pension Share 20%= 30,000

270,000

270k (535k x100= 50.46% TOTAL actual pie, incl. pension)

Pre-nuptial agreement

• a pre-marital agreement would not be upheld if this would prejudice the reasonable requirements of any child of the family. It would also be unfair to hold the parties to their agreement where circumstances had changed in a way that was not envisaged when the agreement was entered. It may well be unfair to hold the parties to their pre-marital agreement where the needs of one of the parties would not be met by doing so, or he or she would not be compensated under the second strand identified in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24.

• any informal agreement between spouses relating to ownership of the home will not be enforceable unless it is properly recorded.

Judge has the ultimate say on the pre-nuptial agreement

Change of circumstances esp. things not anticipating would happen, children, length of marriage, conduct

s.25(1)- First consideration CHILDREN

http://www.paradigmfamilylaw.co.uk/financial-remedy-divorce-timetable/

• “All the circumstances of the case”/ “conduct”

• Court will give effect to a pre-nup if:

  • It is freely entered into

  • With full appreciation of its implications

  • With full and frank disclosure

  • Unless it would not be fair

• A pre-nup will not be upheld if it prejudices the reasonable requirements of any child of the family

• Needs & compensation met…?

Heads of Agreement

Applicant

• 205,000 lump sum

• 20% pension share

• 150 pcm extendable maintenance for 2 years

• Agreed child maintenance of 164.07 per week

• Myles will pay utilities until sale (not in HOA but necessary)

Debbie- respondent

• Debbie will pay mortgage until sale (do it as undertaking)

• Debbie will receive balance of sale proceeds

Drafting points

1. 3 parts- Title of Suit, Preamble, Operative Part of Order

2. The Court’s powers/ undertakings [s23-24D MCA]

3. Extendable/ non-extendable spousal maintenance [s25A(3) and s28(1A) MCA]

4. When maintenance for children can be included [s8(5) and s 9(2) CSA 1994]

5. Dismissal of capital, income and death claims

6. Costs/ Liberty to Apply

• Preamble and Undertakings

  • Parties

  • Warnings

  • Definitions (only define if you would use)

  • Recitals

  • Undertakings (General+ Specific ie. pay utilities and mortgage)

• Matrimonial Home

• Maintenance

  • Child Maintenance

  • Spouse Maintenance

• Other clauses

Dismissal of claims

Capital- Once lump sun is paid, it is a capital clean break for both Myles & Debbie

Income- Myles: there will be an income clean break after 2 years so dismiss AFTER the expiry of term (s25A(3) MCA)

Debbie: It is an income clean break so dismiss

Inheritance claim I(PFD)A 1975- Myles: if D dies during currency of maintenance term, M can claim on D’ s estate so dismiss when maintenance ends

Debbie: she cannot claim on M’s estate so dismiss

Procedure

• Send to the Court

• P154-155

• Signed Draft Order plus 2 copies

• Pension Sharing Annex (if necessary)

• Statement of Information signed by both parties

• Fee

Variation of Consent Order

Can Marianne Bailey apply to extend the duration of the maintenance payments beyond that stated in the order? If so, what are the chances of her success?

• S31(2)(b) Periodical payments are variable

• Extension of terms can be prevented from Consent order terms, only be able to apply...