The financial division between a divorced husband and wife and what the court takes into consideration when making this decision

1. FAMILY LAW
5. FINANCIAL PROVISION
ON RELATIONSHIP
BREAKDOWN
Professor Thérèse Callus
Module convenor
m.t.callus@reading.ac.uk
School of Law

2. This set of lectures will examine the law and policy
relating to how finances are divided up between
members of a couple when the relationship breaks
down.
• What is the position of informal cohabitants?
What of ‘common law marriage’?
• Financial provision upon divorce / dissolution of
civil partnership:
-framework in s 25 of the Matrimonial
Causes Act 1973 (mirrored in Schedule 5, CPA
2004) and the evolving case law and practice
guidance;
- question of pre-nuptial agreements and any
need for reform. 2

3. FINANCIAL PROVISION UPON COHABITATION BREAKDOWN
- Property law or family law?
Consider this scenario:
Chris moves into Pat’s house which Pat has bought. They
live together for the next 20 years, have 2 children. Chris
gives up work to look after the children until both children are
at senior school and then returns part-time. When the
youngest is 18, Pat tells Chris the relationship is over and
they must separate. Pat has an established career and good
earning capacity and potential. Chris has only been working
part-time for the last six years and has a very low income,
with little prospect of career progression, and virtually no
pension.
- ‘Common law marriage’ myth – ‘no ring, no rights’
- Remember ‘Mrs’ Burns: no family law provisions to deal
with financial consequences of informal cohabitation
3

4. …and the myth goes on:
British Social Attitudes Survey 2019:
- 46% respondents still believe in common law marriage
- most likely to believe (55%) are those living in
households with children (and the most likely to suffer
economically…)
Ad hoc recognition adds to myth:
‘Perhaps more significant for the perpetuation of the
‘common law marriage’ myth is the inconsistent policy
framework that does exist in England and Wales, which
sometimes recognises cohabiting relationships and
sometimes does not.’
G.Fraser, Cohabitation reform: what recent statistics mean for the
cause [2019] Family Law 717 (July). 4

5. 5
No ring, no rights – no law?
Property law: Stack v Dowden [2007] UKHL 17
If joint names  presumption equal shares
Can presumption be rebutted?
- consider common intention and
constructive trusts
- intention inferred from facts
- Intention may be imputed by the court
But in contrast to provisions upon divorce, court is
limited in what it can do to achieve ‘fairness’.

6. Jones v Kernott [2011] UKSC 53
LLJ Walker, Hale:
• Equity follows the law – presumption: joint tenants
• Displace presumption by showing (i) parties had different
intention at the time or (ii) intention later formed that
shares would change
• Deduce intention from their conduct (infer)
• If clear intention changed, but not what to, share will be
what court considers fair having regard to the whole
course of dealing between them (impute)
• Each case = fact dependent
Dobson v Griffey [2018] EWHC 1117 (Ch)
6

7. 7
In the matter of an application by Siobhan McLoughlin
for Judicial Review (NI) [2018] UKSC 48
• Widowed parents allowance – only payable to
widow/widowers (ie requires marriage).
• Highlights lack of protection for unmarried couples. Step
towards increased recognition in certain circumstances,
but ad hoc.
• Supreme Court looked at purpose of the allowance –
payable to ‘parents’ for the benefit of children to offset
financial loss following death of one parent
• State should not discriminate against children on basis of
parents’ relationship status, ie lack of formally
recognised relationship.

8. Law Commission: Cohabitation: the financial consequences
of relationship breakdown, Report No. 307 (2007):
- statutory scheme to apply to cohabitants
- qualifying criteria
- reliance upon ‘economic impact’ of cohabitation
- question whether opt-in or opt-out?
Cohabitation Rights Bill 2017-2019
 NO ACTION
Civil Partnerships, Marriages and Deaths (Registration etc)
2019
• Potential reform for informal cohabitants may be further
stifled by focus on permitting Civil Partnerships for
heterosexual couples
• Civil Partnership is a formal process – many cohabitants
‘fall into’ cohabitation, so CP may still not address large
majority
8

9. Financial provision upon divorce/dissolution
9

10. Woman wins right to seek money from
ex-husband 30 years after breakup
Finally, divorced women who
bring up the children have
some legal value
Ex-wives head to the supreme court
for appeals over divorce settlements
Banker fails in challenge to
prenuptial agreement with heiress
10
Financial provision upon
divorce – the headlines…..

11. 11

12. 12

13. Orders available under the MCA 1973
• Income orders:
- s23 (1)(a)(b): Periodical (maintenance) payments
- s23(1)(c) lump sum payments
• Property orders:
- s24, s24A: Property adjustment orders - transfer of
property and orders for sale
– Mesher [1980] 1 All ER 126 – identifiable point in time eg child
attains majority
– Martin [1978] Fam 12 – unidentified time eg if ex-spouse
remarries
• Pension orders:
- s21A, s24B-D:
• Clean Break orders:
- s25A: duty on court to consider, but not at expense
of a fair result 13

14. 14

15. Variation and enforcement of orders
S31 MCA 1973 – vary periodical payments but not lump
sum;
- also possible to vary consent orders where clear
evidence of fraudulent non-disclosure…
… but no variation where spouse mis-uses original award
and comes back for more:
• Mills v Mills [2018] UKSC 38
15

16. 16

17. 17
Charman v Charman
• Married nearly 30 years; H very wealthy
business man; W gave up work to look
after children.
• Joint assets valued at £131 million
• W had £8 million
• H had £123 million
Outcome: H ordered to pay £40 million to
W (+her own £8m) = 36.5% of total assets
 London = ‘divorce capital’

18. • S25 Matrimonial Causes Act 1973
No overall objective in the statute
• s25(1) – first consideration given to welfare of any minor
child
• s25(2) (a)-(h) checklist of factors – a ‘rag-bag of
Parliamentary anxieties and statements of the obvious.’
(Peter Harris)
• s25(a) financial resources
Charman v Charman [2007] 1 FLR 1246.
Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 
McCartney v Mills McCartney [2008] EWHC 401
Prest v Petrodel [2013] UKSC 34
18

19. 19
Miller v Miller

20. McFarlane v McFarlane
20

21. • S25 Matrimonial Causes Act 1973
No overall objective in the statute
• s25(1) – first consideration given to welfare of any minor
child
• s25(2) (a)-(h) checklist of factors – a ‘rag-bag of
Parliamentary anxieties and statements of the obvious.’
(Peter Harris)
• s25(a) financial resources
Charman v Charman [2007] 1 FLR 1246.
Miller v Miller; McFarlane v McFarlane [2006] UKHL 24 
McCartney v Mills McCartney [2008] EWHC 401
Prest v Petrodel [2013] UKSC 34
21

22. • s25(2)(b) needs of the parties
‘Plainly needs does not mean needs. It is a term of art’:
Mostyn J in FF v KF [2017] EWHC 1093 (fam).
‘…The most common source of need is the presence of
children…But another source of need is having to look after
children or family members in the past. Many parents have
seriously compromised their ability to attain self-sufficiency
as a result of past family responsibilities….All couples
throughout their lives together have to make choices about
who will do what…The needs generated by such choices
are a perfectly sound rationale for adjusting the parties’
respective resources in compensation’: Hale LJ in Miller [at
138].
• Family Justice Council, Guidance on ‘financial needs’ on divorce
(April 2018). 22

23. S25(2)(b) The needs, obligatins and responsibiliies of the
parties
- formerly ‘reasonable requirements’ – Conran case
- subjective assessment, but risk of discrimination
- Why should the surplus be kept by the ‘breadwinner’
spouse where the ‘home-maker’ spouse has given
equivalent benefit to the family?
- This changed with White v White and focus on equality of
contributions
- Needs generated by the relationship – ‘generous
interpretation’ ?
23

24. 24
•s25(2)(c) standard of living
Miller vMiller; McFarlane v. McFarlane [2006] UKHL 24
- standard of living and NOT expectation of a lavish
lifestyle
Dart v Dart [1996] 2 FLR 286
McCartney v Mills (supra)
• s25(2)(d) Age of each party and duration of marriage
• Total length of relationship = cohabitation + marriage:
Kokosinski [1980] 1 All ER 1106
GW v RW [2003] EWHC 611
Miller v Miller (supra)
Sharp v Sharp [2017] EWCA Civ 408

25. • s25(2)(e) physical or mental disability
M v M (Property Adjustment: Impaired Life
Expectancy) [1993] Fam Law 521
• s25(2)(f) Contribution to welfare of family
• White v White [2001] 1 AC 596 
• Wyatt v. Vince [2015] UKSC 14 and Wyatt v
Vince (no. 2) (Settlement:publicity) [2016]
EWHC (Fam) 1368
• Gray v Work [2017] EWCA Civ 270
25

26. 26
White v White
34 year marriage, business partners in farming
1st instance found assets = £4.6million
• Mrs White’s sole property: £193,300 (mostly pension
provision)
• Mr White’s sole property: £1,783,500 (including sole
owned farm, worth £1.25million)
• Both had jointly owned property, (family home and
farm) worth £1,334,000 each (partly assisted by H’s
father for initial purchase).
- At 1st instance: assessment of wife’s ‘reasonable
requirements’ - £980,000…actually awarded £800,000
- Court of Appeal: awarded £1.5m + own money (c. 2/5
overall wealth to recognise H’s family’s contribution).
Confirmed in House of Lords.

27. White v White cont’d
• House of Lords:
– Rejection of ‘reasonable requirements’
– Assess respective contribution to welfare of the family
without discrimination – no distinction between home
maker and breadwinner
– Test outcome by ‘yardstick of equality’
‘There should be no bias in favour of the money maker
and against the home-maker and child-carer,’ per Lord
Nicholls.
‘This is no largesse by the husband, it is her (the wife’s)
entitlement deriving from her valuable contribution’ per
Coleridge J, RP v RP [2008] 2FCR 613 [63]. 27

28. • s25(2)(f) Contribution to welfare of family cont’d
• White v White [2001] 1 AC 596 
• Wyatt v. Vince [2015] UKSC 14 and Wyatt v
Vince (no. 2) (Settlement:publicity) [2016]
EWHC (Fam) 1368
• Work v Gray [2017] EWCA Civ 270
Stellar contribution?
• Cowan v Cowan [2001] 2FLR 192
• Lambert v Lambert [2003] 1 FLR 139
• Charman v Charman (supra)
28

29. 29
•s25(2)(g) Conduct of the parties…inequitable to disregard
Wachtel v Wachtel [1973] Fam 72
K v K (Financial Provision: Conduct) [1990] 2 FLR 225
Clark [1999] Fam Law 533
Miller (supra)
…it is impossible for judges to ‘unravel mutual recriminations
about happenings within a marriage’, per Lord Nicholls in Miller.
Charman v Charman [2006] EWHC 1879 (Fam)
- conduct is the ‘elephant in the room, incapable of definition
but easy to recognise’, per Coleridge, J.
K v L [2010] EWCA Civ 125
• s25(2)(h) Loss of benefits – of little application today
because of specific pension orders.

30. 30
White
C/A awarded
approx 2/5 overall
wealth to W.
Upheld by H/L.
•Contributions
assessed without
gender
discrimination
•‘reasonable
requirements’
swept away;
• test outcome by
yardstick of
equality
McFarlane
C/A awarded ppts
for five years; H/L
made it open
ended.
•Clean break not
possible here
(school-age
children).
Charman
£40m to W approx
36.5% total assets
•All property
available for
sharing
Miller
C/A awarded W
approx 1/6 of H’s
assets (but
uncertainty re
value of shares)
Upheld by H/L
•Conduct must be
‘obvious and
gross’
•No legitimate
expectation of
lifestyle
•Non-matrimonial
prop may become
matrimonial

31. Principles
• Overarching principle of fairness
- 3 strands to fairness:
– needs
– compensation
– sharing
Often simply case of ‘balancing the unfairness’
31