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Mesher Orders: you don’t always have to say ‘yes’

Byron James, Barrister, of 14 Gray's Inn Square considers the utility of Mesher Orders and asks whether they are always as suitable to the parties' needs as might be suggested by the case law.

Byron James, Barrister, 14 Gray's Inn Square

Byron James, Barrister, 14 Gray's Inn Square

The reflex response is a proven outcome of behaviour conditioning: "Yesterday I rang a bell as I gave the dog some food; today I rang a bell and the dog salivated, expecting food". The general idea being that one may introduce a stimulus, which ordinarily would not have any typical behavioural response, but, after conditioning, the stimulus then produces an innate reflexive response. Hence the fame and significance of Pavlov's dog. Despite bell ringing being the most well known trigger, it was not the first used. The phenomenon was discovered when Pavlov noticed that the dog would salivate expecting food, not necessarily in the presence of food, but in the presence of the lab technician whose task it was to bring the food. This associative response became repeated with various different stimuli, including bell ringing, to demonstrate that a reflexive response could be conditioned to be triggered, irrespective of the relation of the stimuli to the actual desired outcome.

Conditioned responses represent the mainstay of many a family lawyer's career; the knowledge of, and application thereto, of the accepted norms of the family law world day-in-day out: as one stands in some far flung FPC explaining to a father who has not seen his 4 year old child for three months, solely because of the mother's intransigence, that a contact centre is needed so as to 'rebuild' his relationship with the child, repeating over and over, "that is just how things are done". 

The small to medium capital ancillary relief cases are also fertile ground for family law related Pavlovian responses. A common scenario: after a marriage of, say, seven years, there is a house, a wife who does not work at all/only works part time, she has little to no mortgage capacity, there is a child/children, a husband who does work and earns well (say, £40-80k net), there is little other capital of relevance and a smallish mortgage on the property. This scenario, to many a family lawyer, is to ring a bell to Pavlov's dog: whilst the dog salivates expecting food, the family lawyer's conditioned reflexive response is to presume the appropriateness of a Mesher Order.

Pavlov tested whether, once a dog's behaviour has been conditioned, it would stop salivating if the bell kept sounding without food ever being brought. The result was that the dog would salivate less until not at all, and, whilst it is unclear whether the dog returned completely to an unconditioned state, it became clear that the efficacy of the bell became much less where there was little reward. The malleability of the dog then can be contrasted against the rigidity of the family lawyer, the reflexive response seemingly consistent irrespective of the reward: like a child pulling faces in the wind, once adopted, such thinking remains.

The rationale for Mesher Orders comes from the application of the sharing principle, and the desirability of equality, in the context of need: a need for a home for the children. There is limited capital; more specifically, to sell the home would either realise insufficient capital to find somewhere else suitable or would incur the costs of sale just to find somewhere about the same. In certain cases, the deferment of sharing to a time when the need to house children no longer exists is one of the cleverest arguments in family law. It symbiosises sharing and need; it prioritises the children.  The cleverness of the principle has seduced many into idolising it as a panacea.

The authorities for endorsing their use are well known. Elliot v Elliot [2001] 1 FCR 477 followed the approval of Mesher Orders in White v White [2000] UKHL 54, [2001] 1 AC 596 with approval of its own. Here, Thorpe LJ allowed a second appeal involving a Mesher Order, reinstating the original order drafted by the district judge, referring to (para 7):

"the husband's reasonable entitlement to deploy capital to house himself at the end of a long marriage during which he has worked hard, mainly in the police service, and has contributed his earnings to the building of family capital."

There were three crucial factors in this case: the marriage was 20 years long, the children were 16 and 18 and whilst at the time of the hearing 'the husband's current income [was] not materially greater than the wife's, his earning capacity is potentially far stronger' (para 8).  The general rationale for the Mesher Order was that (para 7):

"The husband has a reasonable and discernible need for his share of the family capital at the earliest time that the needs of the children permit. As soon as the wife's responsibilities as the home-maker for the children reach a point of natural termination, at that point clearly the husband is entitled to his capital share."

The share was determined at 45%, only a slight shift from an equal division. The term of the Mesher Order was only to be for a maximum of 5 years, but possibly just two; the length of the marriage purportedly entitling the husband to a share approaching equality; the minority of the children justified his being denied that share for a short period of time. The discrepancy in earning power was not considered a relevant factor in the capital award. The circuit judge (in the first appeal) had removed the district judge's trigger clause in the Mesher and, instead, simply allowed the wife to remain in the property until remarriage, death, cohabitation or voluntary removal. In doing so he stated:

'To put the wife in a house which she will have to sell or remortgage cannot be right. I see a strong argument for deleting that clause. The house is not capital but is somewhere for the wife to live.'

To compensate this balancing toward the wife, the circuit judge retained the lack of Mesher but deleted the nominal maintenance order and allowed for a clean break.  Thorpe LJ described this as too 'partisan a perspective':

"If the judge thought that the deletion was justified by the compensatory deletion of the nominal periodical payments order, I think he was plainly wrong. There are instances in which the interrelationship of capital and income orders justifies the increase of a wife's capital share as compensation for the loss of an income claim. I do not think that this was appropriately one."

It is interesting to note the factors that were not considered: the use each party would make of the capital; the reasonably foreseeable effect that the order would have on both parties; the actual likelihood of the wife being able to come and increase her nominal maintenance claim in future. The last being all the more pertinent following Thorpe LJ's criticism of the amount of litigation that had preceded the appeal (para 12) where his judgment actually invites further litigation whereby the wife's periodical payments 'would become real and not nominal'.

The lack of consideration of such factors is even more surprising given Thorpe LJ's decision in Dorney-Kingdom v Dorney Kingdom [2000] 2 FLR 855. Here, divorce following a 17 year marriage, with children aged 14, 12 and 9 resulted in a district judge awarding the wife an outright transfer of the FMH. The husband had re-housed himself in a home with a not insignificant net equity and therefore had no particular need for the money, save for his argument that his debts provided him with a capital need.  In transferring the FMH to the wife the district judge did so (para14):

"....on the basis that the husband is in the stronger position now and will continue to be so in the future with his successful business, with a home which he has already acquired, with all his pension provision and insurance policies, and even taking into account his liabilities, comparing all that with [the wife's] present and future circumstances, I am satisfied that Wyndham Lodge ought indeed to be transferred outright now to [the wife] …"

The circuit judge adopted this view too (ibid):

"I cannot really criticise the district judge at all for dealing with the house … as he has done. It goes without saying, partly in doing, that he has protected the position of the children, but that is not the whole answer, because as [the husband] says, a deferment of a charge would not affect the children. But it really seems to me that taking a robust view, as I am sure the district judge did, and looking at the actual potentials that I have touched on at some length, and looking at the capital that is owned, [the district judge] has done the right thing."

Thorpe LJ did not agree with either. It was felt 'necessary' to find a 'clear explanation as to why the husband was stripped of his acquired capital beyond the point that enabled his wife as the primary carer to discharge her responsibility for the children until they achieved independence'.  Thorpe LJ stated that he bore in mind (at 16):

"[the] Mesher order has been criticised in a number of decisions in this court for producing a harsh situation in which the primary carer, having discharged her responsibility to the children, is then left in a position when she is unable to rehouse herself as an independent person, probably at a relatively vulnerable stage of life."

Despite noting this criticism, Thorpe LJ found two rationalisations for both the Mesher Order itself and the calculation of the percentage: the wife's housing needs at the time of sale and compensation to the wife for having to draw on her own resources to maintain the relatively costly property for her and the children's benefit for a decade or so. 

Taking these in turn, the exercise of determining the wife's housing need in over ten years time is recorded in just over five lines, not a detailed examination. Instead, it was simply stated the given percentage would equal a figure of £166,000 'in today's money', this being considered sufficient for re-housing at 'some stage in the future'. No regard was had to what is 'reasonably foreseeable', as per the section 25 exercise, it being very difficult to argue that either a property will sell for any particular amount in 10 years' time or that that amount would be capable of purchasing something suitable. 

As regards the compensation for drawing 'on her resources', Thorpe LJ found that (at 21):

"On those figures it will be seen that the disparity of income between the two is no more than the conventional disparity, by which I mean the wife's independent income represents about a third of the joint incomes."

The reality of giving a wife 25% more of an indefinable amount of capital at some stage in the future is odd compensation indeed for requiring her to operate and fund an expensive home on a third of the parties' joint income. The rationale for that is not especially principled. These arguments have, unsurprisingly, been adopted as if they were principled and sensible approaches to take the determination of capital division.

Munby J took a different approach in B v B (Mesher Order) [2003] 2 FLR 285, which held that the Wife, who had a young child, should not be subject to a Mesher Order. The facts of the case were not typical. The marriage was very short (1 year) and the child was very young (1 year). The rationale of the decision was that a young mother, whose earning capacity would be consequently adversely affected and whose post-marriage contribution to the marriage of raising such a young child should not be underplayed, would only be unfairly discriminated against if she would be required to relinquish capital at some stage in the future. The problems of the unknown were identified too, with the only eventuality the Court could reasonably foresee being that the husband's ability to recreate the capital lost under the order was real, contrasted against a wife who had no such ability, and, further beyond that, such capital might actually be recreated in relatively short space of time.

It is surprising that the principles from B v B are not more vogue. A young mother's earning capacity is always subject to a wide judicial spectrum of opinion: sometimes expected to work part time until the child is at school when she will work full time; other times expected not to work at all, perhaps until some part time potential employment can be realised. There is no exact application of principle here, rather, just differing personal judicial opinion on whether and when mothers should work; although, clearly, another element of uncertainty. The post-marriage contribution to the marriage of raising the child is something rarely applied in capital terms, being seen typically as more income order related. However, the reality and efficacy of such is really quite potent: it is difficult to think of a contribution more relevant that something directly engaged with the court's first consideration. Finally, crucially and worryingly, the argument that seldom ever works, but frankly, really should, is the uncertainty point. Since when was there ever such mass signing up to the unforeseeable (reasonably or otherwise)? Where is there statutory endorsement of placing (usually one of) the parties in such a vulnerable position? The certainty which Thorpe LJ places upon knowing how much the wife will be getting in over ten years time based only upon what it is equivalent to in today's terms is difficult to rationalise. The relevance in ten years time of what the capital is worth today is quite limited: the important thing being the value that the capital has, i.e. it will only be as good as it can be usefully used for something else.

Two of the main authorities supporting the use of Mesher Orders are therefore either bereft of both clear principle and consideration of the impact upon the parties of such an order (Elliot) or, when reasoning is given, seem lacking in terms of coherent principle and dangerously unconcerned about the uncertain future signed up to (Dorney-Kingdom). This is no better demonstrated than by the 'calculations' used to derive an appropriate percentage. The principles suggested by Thorpe LJ in both cases are often vaguely gone through as if going-through-the-motions, whilst even at the highest point of their rationality it is still impossible to sensible deduce a logical process by which one can find a principled outcome. It is instead simply broad brush: does one start at 50/50, or 60/40 or 66/33?

The criticism of this argument would probably involve the reminder that ancillary relief is rarely about exact formulas, it is about the broad brush application of general principles to specific facts. Whilst that flexibility is on the whole useful, it does little to justify the willingness of so many to sign up clients to an uncertain future in this specific instance, where figures seem to be plucked out of thin air. Either one has a principled reason for providing for a Mesher Order, centred on the need to allow for both to share in the capital, whereby one can reasonably foresee that the capital afforded will meet the needs of one or both parties, bearing in mind the respectively different financial positions that each are (again) reasonably foreseeable to occupy or, surely, one does not have a Mesher Order at all.

There can be few other areas where such risks are taken in such a casual and habitual fashion. Unless one is dealing with a short period of time or a significant sum of money (which might lead one to question the appropriateness of a Mesher Order anyway) it is difficult to envisage it being possible to sensibly rationalise any particular percentage outcome for a client; if one cannot rationalise a percentage, then perhaps no Mesher Order at all would be more appropriate. Remember, you don't always have to say 'yes'.