Financial Remedies Update 13 October 2011 Michael Horton

1. Financial Remedies Update13 October 2011Michael Horton CHAMBERS

2. Overview • Case law last 12 months ish • Family Procedure Rules CHAMBERS

3. International element • News report 5 September 2011 • French court orders H to pay W €10,000 • Damages for ‘not enough sex’ • Breach of Art 215 of Code Civile CHAMBERS

4. International element • English court’s view? … CHAMBERS

5. International element • ‘Once a week is enough’ • Mason (1980) CA CHAMBERS

6. Radmacher • No presumptions, but • Uphold agreement unless … • … And it’s just one of the factors CHAMBERS

7. Bankruptcy & order for sale • Standard order for sale • When do beneficial interests alter? • When order made/ decree absolute? • Completion of sale? • Warwick v Yarwood says latter CHAMBERS

8. Bankruptcy & order for sale • So, if bankruptcy imminent or feared • Redraft order for sale (2.4) CHAMBERS

9. Annulment of bankruptcy • Do it, if at all, early • Make provision for trustee’s expenses • Mekarska: no annulment otherwise • Should bankruptcy court adjourn if there are pending divorce proceedings? CHAMBERS

10. Imerman • Not all doom & gloom • Documents may not be confidential • ‘Secret plan to hide assets’ • Documents clearly show, post form E, there has been non-disclosure CHAMBERS

11. Cohabitation • Periodical payments order in force • Effect of payee’s cohabitation • Just goes to quantum • Not to be equated with re-marriage • What ought partner to contribute to reduce payee’s income needs CHAMBERS

12. Cohabitation • K v K Coleridge J • Why not equate with re-marriage? CHAMBERS

13. Cohabitation • This is ‘heresy’ • So says Court of Appeal in Grey CHAMBERS

14. Cohabitation • Why is pre-marital cohabitation different? • See 4.2.3 • Outcome at 4.2.6 CHAMBERS

15. Appeals • Kaur v Matharu (pre-FPR) • Children appeals more lenient re fresh evidence • ‘May be’ so in ancillary relief • Probably survives FPR 2010 (5.1.2) CHAMBERS

16. Appeals • Need permission • 21 days • Consider need for updating evidence • If appeal allowed, J to exercise discretion afresh or send back down? CHAMBERS

17. Barder appeals: Richardson • Wife’s death not a Barder event • Her award not based on needs • ‘Earned her share’ CHAMBERS

18. Richardson • Impact of damages claim against business • Lack of full cover a mutual mistake • Entitling H to set aside? • No, it was a ‘known unknown’ (5.4.5) CHAMBERS

19. Richardson • But insurers refusing any liability • This was ‘unknown unknown’ • H did not know they would refuse and had no way of finding out CHAMBERS

20. Post FPR set aside • PD says must appeal • But set aside still possible • See FPR r 4.1(6) (5.5.2) CHAMBERS

21. Joinder/ intervention • Join 3P • Mini ToLATA claim within the financial order proceedings (6.1) • Or … (6.2) CHAMBERS

22. Joinder/ intervention • Don’t just invite 3P to intervene (6.3) • If they don’t, will be no issue estoppel CHAMBERS

23. Joinder/ intervention • How to join? • Goldstone says there is power to join • Even though there is no specific power in the rules CHAMBERS

24. The new inspection appointments • Order for disclosure against non-party under FPR 21.2 • Or seek permission to issue witness summons • Don’t forget Bankers Book Evidence Act CHAMBERS

25. Non-matrimonial property • Jones approach: • Work out the current value of the pre-acquired asset • Deduct that from total assets • Divide result by two • Cross check result as % of overall CHAMBERS

26. Non-matrimonial property: Jones • Keep needs and sharing separate • Compare results (7.1.2) CHAMBERS

27. Non-matrimonial property • H’s co worth £2m at time of marriage • CA say this now worth £9m • So matrimonial property is £25m less £9m • W gets 50% of £16m, ie £8m CHAMBERS

28. Non-matrimonial property • How did H’s £2m co in 1996 … • … become £9m in 2006? • Springboard • Plus passive economic growth • NB cross-check on % of overall CHAMBERS

29. Building blocks? • Pleadings? • Issues • Findings • Evidence CHAMBERS

30. Pre-acquired assets: N v F • Same approach • But needs left W with 44% of overall • NB ‘add backs’ at 7.2.2 • Evidence of earning capacity (7.2.3) CHAMBERS

31. Pre-acquired assets: Robson • Assets all pre-acquired inheritance • Needs based claim • W aware living on mismanaged inheritance • Could not base future income needs on excessive marital standard of living CHAMBERS

32. Pre-acquired assets: Robson • NB no interest can run pre-dA (7.3.5) • Timing of payment of lump sum • Where coming from proceeds of sale • Guidance at 7.3.7 • Art not science! CHAMBERS

33. Pre-acquired assets: K v L • W shares worth £680k on marriage • Now, pre-tax £58m • Family lived off (not all of) dividends • W offered £5m • Bodey J ordered just that CHAMBERS

34. Pre-acquired assets: K v L • No sharing • Just needs, generously interpreted • H’s appeal to CA dismissed (7.4.4) CHAMBERS

35. Pre-acquired assets: Whaley • No classification into ‘dynastic’ • & ‘settlor-beneficiary’ trusts • Test still whether trustees likely to advance capital • W not confined to needs but small ‘sharing’ element on top CHAMBERS

36. Pre-acquired assets: Mansfield • Personal injury damages not immune from financial orders • But court has to reflect reason why they were awarded in first place • Mesher here once children grown up and H’s needs would increase CHAMBERS

37. Post-separation assets • SK v WL: no need for clear boundary between matrimonial/ non-matrimonial property • W got 40% overall • Big increase in assets over 3y separation CHAMBERS

38. Schedule 1 lump sums • Just for capital needs? • Could not be used to obtain capitalised child maintenance (ie in advance) • Or to clear income-related debts (ie in arrears) • Until … CHAMBERS

39. Schedule 1 lump sums • DE v AB Baron J • M sought housing fund • Plus lump sum partly to clear debts • DJ found CSA assessed F’s income too low CHAMBERS

40. Schedule 1 lump sums • On F’s appeal • Lump sum broad brush • Lump sum could cover debts incurred for eg mortgage payments as for ‘benefit of child’ • Revenue costs could go into lump sum as CSA in error CHAMBERS

41. Schedule 1 lump sums • CSA appeal? • CSA variation? CHAMBERS

42. Schedule 1 settlements • Enforcement difficulties • Transfer and charge back ok CHAMBERS

43. Schedule 1 lump sumsfor legal fees • CF v KM says yes to interim lump sum under Schedule 1 • Even if no power to order pp’s • R v F Bodey J – just for s 8 proceedings • NB cl 45 LASPO (8.6.2-3) CHAMBERS

44. Future income disparity • Acknowledged clean break case • One party has better income • Adjust capital to reflect income differential? • Murphy says yes CHAMBERS

45. Future income disparity: Murphy • See 9.1.2 • 8 year childless marriage • £3m to go wrong • All hallmarks of clean break & equality CHAMBERS

46. Future income disparity: Murphy • No 65:35 split • Price of a clean break • H v high earning capacity • Unused for c 4 years before trial • ? And illiquid assets too? CHAMBERS

47. Variation of lump sum orders • Is order at 10.1 an order for lump sums? • Or a single lump sum payable by instalments • If latter, court can vary it under s 31 (10.3.1) • H v H says it is latter no matter how drafted (10.3.3) CHAMBERS