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Financial Remedy Update, April 2022

Stephanie Hawthorn, Abigail Pearse and Victoria Potts, associates, and Holly Morrison-Carter, trainee, at Mills & Reeve LLP consider the most important news and case law relating to financial remedies and divorce during March 2022.













Stephanie Hawthorn, Abigail Pearse and Victoria Potts, Associates,













and Holly Morrison-Carter, Trainee Solicitor, Mills and Reeve


Case Law Update


J & K v L (Schedule 1: older children) [2021] EWFC B104 (30 December 2021)

This case involved an application by the mother under Schedule 1 of the Children Act 1989, this application was the latest of many.  The mother (aged 57) (hereinafter referred to as 'M') and the father (aged 50) (hereinafter referred to as 'F') began their relationship in 1999.  Their cohabiting relationship was intermittent, but there were two children of the family, N (now aged 20) and K (now aged 18). M was the children's primary carer - the children did not have a relationship with F. F had another relationship with a woman, 'P', around the same time as his relationship with M.  F had two children with P, aged 20 and 17.  Consensual financial support was agreed between F and P - there was an amicable relationship. 

In deciding the current appeal, HHJ Hess made clear that the principal task at hand is to find a fair result for the children.

The history of the case is summarised very briefly below to the extent that it is helpful, but in summary, this case involved ongoing and bitterly contested proceedings that caused anguish and upset for both parties and their children.

1. 2001 Proceedings

Court proceedings were first commenced in 2001 whilst M was living in rented accommodation. It was agreed that a property would be purchased for the parties' youngest child (N).  DJ Black approved a consent order which obliged the F to pay M £110,000 to enable her to purchase a property (to be held on trust for the F), as well as child periodical payments of £1,300 per month for N. 

The lump sum payment was not paid and the requirement to pay capital was later discharged.  M has since remained in rented accommodation.

2. 2004 Proceedings

The parties' briefly reconciled, conceiving K.  However, shortly after K's birth,  M commenced further proceedings.  After 22 interim hearings, a decision was made by DJ Berry, recorded in an order dated 16 January 2006. To M's disappointment , the judge ordered child periodical payments of £27,500 per annum (i.e. £1,145.83 per calendar month per child), but dismissed her application for further capital and a school fees order. M was ordered to pay F costs assessed at £60,000, not to be enforced without leave of the court.  To date costs are unpaid.

3. The first 2006 proceedings

M sought to appeal DJ Berry's decision and after 6 interim hearings, the appeal was dismissed and M was ordered to pay F costs of £20,000, not to be enforced without leave of the court.

4. The second 2006 proceedings 

A day after the first 2006 proceedings, M applied for a school fees order - placing the children in fee-paying schools pre-emptively.  Following 6 bitterly contested interim hearings, HHJ Kaye QC held that F's obligation to pay school fees was limited to a period between 2006 to Summer 2009, thereafter to be discharged.

5. The 2011 proceedings

In January 2011, M applied for an increase in child periodical payments and further capital provision. A consent order was approved obliging F to pay £30,736 per annum by way of child maintenance (in effect, an RPI increase on the 2006 order) until each child respectively turned 17 years old or ceased full-time secondary education, whichever date is later.  F was also ordered to pay a lump sum of £5,000 to enable the M to purchase a car for the benefit of the children.  No costs were ordered.  M undertook not to issue any further Schedule 1 application for five years.

6. The 2018 proceedings

M issued a further application under Schedule 1, to vary the 2011 order and for further lump sums for the benefit of N and K.  Within these proceedings, there had been 22 interim hearings.  In 2019, M issued an application for interim periodical payments for N on basis the 2011 order had come to an end given N finished her secondary education.  

On 19 August 2019, DDJ Willbourne dismissed this application on its merits, because N's secured A-Level results were insufficient to gain her a place at her university of choice and on the basis that there was no jurisdiction to make an order as N was now an adult. This order was targeted at M's interim application, made after N was 18, not the main application, which was made before N turned 18. M did not pursue any further remedy for N on the main application.  It was suggested in the judgment that N herself could pursue a revival application under paragraphs 6(5) and (6) of Schedule 1 should she wish to do so.

M appealed this decision, which was dismissed on 29 May 2020, with M ordered to pay F's costs of the appeal, to be assessed on an indemnity basis. The appeal was dismissed on the basis that the court did not have jurisdiction to hear an application for the benefit of N made by M.  Permission to appeal was denied by King LJ on 20 October 2020 on a 'totally without merit basis'.

After a four day hearing to deal with M's main application (on 17 - 20 November 2020), HHJ O'Dwyer adjourned the case on the promise of presenting a reserved written judgment.   Unfortunately, due to a period of illness, the written judgment was not forthcoming.  In May 2021, M's legal team raised concern that K's 18th birthday was fast approaching and the H would seek to rely on the same jurisdiction arguments (i.e. that the court will not have power to make any orders on M's application, but K can bring a claim in her own right) if an order was not in place ahead of K's birthday.  It was then subsequently agreed at a directions hearing on 28 September 2021 that HHJ Hess would determine matters by reference to the audio tapes / documentation from the November 2020 hearing, written submissions to follow from both Counsel and by joining an anticipated application by K. 

Conclusions

Though acknowledging that there is a prohibition on a parent making a new application for a Schedule 1 order on behalf of an adult child where the child is already 18 at the time of the application, HHJ Hess concluded that a variation order does not fall within the meaning of 'further order' as provided for in paragraph 1(5)(a) of  Schedule 1 of the Children Act 1989. 

Paragraphs 1(3) and 1(4) provide that a variation application (as opposed to a new application, e.g. after an earlier order has expired) can be pursued at any point. HHJ's view is that such an order (made when a child is under 18) can continue from the child turning 18 to them ceasing to satisfy one of the relevant extension conditions.  Any other decision would produce an absurd result.

The extension conditions in Schedule 1 justifying financial support for children beyond them being minors are that:

• the child is or will be receiving instruction at an educational establishment or undergoing training for a trade, profession or vocation, whether or not they are or will be in gainful employment; or

• special circumstances are present justifying the making of an order.

HHJ Hess concluded that he did have jurisdiction to hear M's variation application (from the 2018 proceedings) in relation to K and he could vary the periodical payments order made for the benefit of K in 2011.  He could vary the order back to the date of the application (i.e. 28 August 2018, though he chose not to do so in this case) and forwards to the date K ceases to satisfy the relevant extension conditions. The order can be varied on an application by M or on an application by K. Ultimately, an order made before a child is 18 can require transfer of property or payment of a lump sum to take place after the child is 18.

HHJ Hess also commented that he has the power to award lump sums for K's benefit on M's application. Orders for money (by way of periodical payments or lump sum) can be paid directly to K or to M for K's benefit. K was held to meet the relevant extension conditions on the basis that she is likely to, on the balance of probabilities, attend tertiary education in some form or another from September 2022 (after her gap year) and therefore will be 'receiving instruction at an educational establishment'.  HHJ Hess' Order is to continue until K ceases tertiary education up to first degree level (including a foundation course). The periodical payments ordered were to be paid in the first instance directly to M each month, but upon commencement of K's tertiary education, 50% is to be paid to M for the benefit of K and 50% directly to K.

Such rules and principles would also apply in relation to N, but in this case no remedies were pursued by M for the benefit of N at the hearing in November 2020 or subsequently.

It would be wrong to exclude M's right to seek orders that she was entitled to at the time of the application as a result of effluxion of time, particularly where such effluxion is no fault of her own.  In making his order, HHJ Hess considered all evidence presented as to what M reasonably needs to care for K and what K reasonably needs for her own use and in light of the available resources to each the M and F.  


WC v HC (Financial Remedies Agreements) [2022] EWFC 22 (22 March 2022)

This matter relates to a wife's (W) financial remedy application.  In establishing an appropriate financial division of assets, Peel J gave consideration to (a) the weight to be attached to a Pre-Marital Agreement, (b) the weight to be attached to a Post-Marital Agreement and (c) issues of potential inheritance and wider family wealth.

The parties, who lived a 'very affluent' lifestyle (which was largely funded by the husband's (H) father), begun cohabiting in 2002/2003 and married in September 2004.  They separated in 2019. There are two children of the marriage who lived in Switzerland with both parents from 2010 until 2017, and then relocated to England for their schooling from 2017 onwards.  Prior to marriage, a pre-nuptial Agreement was signed, followed by a supplemental agreement concerning child maintenance and a further two Swiss agreements which mirrored the English pre-marital agreement. The agreement made sliding scale provision for the W in the event of divorce up until 1 September 2014.  The agreement was silent as to provision beyond that date. W alleged within these proceedings that she signed the agreement as a result of undue pressure, this was disputed by H.

It was agreed in 2017 that the children would attend school in England, with the intention being that W and the children would live in England, with the expectation that they would spend time visiting the F who was to remain based in Switzerland.  In June 2017, H proposed the idea of a Post-Marital Agreement (PNA).  W was opposed to this from the outset, but H had told W that she could not move with the children to England without a PNA.

Lawyers were instructed and a PNA was drawn up in August 2017 after two months of negotiation.  W was entitled to approximately 56% of the combined net assets (excluding H's prospective inheritance) under the terms of the agreement.

Mirror agreements were drafted in Switzerland and were due to be signed on 29 August 2017. The same day, W's GP certified that W was showing 'true mental distress' which was 'unconducive to calm decision making'.  W made clear she would not sign the English document without seeing the Swiss documents.  W also made clear that she did not intend to renegotiate the English post-nuptial agreement and that she would take steps to sign it, but she never did.

W did not sign the document and messages to her friend set out that she was feeling 'powerless, blackmailed and abused'.  W's solicitors approved the agreement on 22 August 2017.  Peel J noted that the document, to which W had approved in written correspondence, recorded that each party entered into it of their 'own free will and without undue influence or duress'. There was no inequality of bargaining power, W's solicitor signed the agreement and did not assert it was conducted under undue pressure. 

At no time was it raised that W was under undue pressure (albeit she would have been under some pressure), nor that she thought the terms were unfair, her concern seemed to be the fact that she had not had sight of mirror Swiss documents.  Both parties were under some pressure as W wanted to move to London, and H was concerned about the impact of the children and W relocating from Switzerland.  However, Peel J concluded W was not subject to undue pressure or duress.

Peele J concluded that each case is fact specific. Ordinarily, an agreement takes effect when both parties sign.  In this case, the agreement stated it would come into force on the date that the last party signed. Parties may in some cases agree in correspondence that an agreement has been reached, and signatures are not required.  In this case, it was held to be unreasonable for the post-nuptial agreement to bind W in a Radmacher sense, absent her signature, when it expressly took effect on both parties signing.  It was one of the circumstances of the case to be taken into account when considering the section 25 factors and its terms were relevant, but not determinative. The PNA was not 'vitiated or tainted by undue pressure or duress'.

Peel J's award provided the W with approximately 60% of the present total net assets, which amounted to £7.45m. This went beyond what was provided for within the PNA to meet W's needs judged against all relevant factors.

Importantly, Peel J gave a detailed set of introductory comments which began with him stating that W's statement "crossed the line, and descended into a number of personal, and prejudicial matters" directed at the husband, but which were not relevant to the issues being dealt with.  Peel J unequivocally said that it is erroneous to think that it will assist one's case to paint an unfavourable picture of the other party by describing them in 'pejorative terms'.

Ultimately, section 25 statements should not be used as an opportunity for one party to personally attack the other using rhetoric or argument, they should contain evidence.  Judges will base their decisions on the relevant evidence provided.

Peel J made clear that court orders, practice directions and statements of efficient conduct are there to be complied with - they should not be ignored.  He was critical of the fact that W's statement, which on the face of it was within the 20 page limit, actually went beyond it given the smaller font and spacing used (which actually meant the document was about 27 pages compressed into 20), making it 33% longer than the H's statement.  He made clear that there is a limit on the length of a statement for a reason, it should help to focus the parties' minds on relevant evidence and encourage a level playing field, the length restriction should not be ignored. 

Finally, Peel J was critical of what he referred to as the H's 'eleventh hour spreadsheet' which provided an analysis of family expenditure during the parties' marriage and since separation, based on financial disclosure that has been in H's possession for many months.  Such an exercise, if to be relied upon, should be provided well in advance of the final hearing (ideally before the PTR or final directions hearing) to enable proper case management and consideration of the issues raised.  


A (Schedule 1, Overspend, Costs Clawback) (Rev1) [2022] EWFC 21 (03 March 2022)

This matter relates to a mother (M) and father (F) who are parents of a child, A, born in 2020. M and F had a friendly relationship for several years before A was conceived in 2019, although their sexual relationship was a short one. F plays no part in A's life.

In 2020, M applied to court for financial provision for A. Prior to the final hearing that took place before Recorder Chandler QC in February 2022, M and F agreed that F would pay the following to M for the benefit of A:

1. A housing fund of £1.35m to purchase a new property to be occupied by M and A until A attains 18 or completes full-time education, at which point the property will be sold and the proceeds returned to F;

2. A lump sum of £75,000 to furnish the property;

3. Child maintenance of £96,000 per annum (£8,000 per month);

4. Finance on M's current car and on a four-yearly basis, additional sums of £45,000 less the trade-in value of M's existing car;

5. The cost of A's education at nursery and private school including two school trips per year; and

6. The cost of installation of a standard electric gate at the new property.

However, M's position was that F should also pay additional sums for A's benefit, including a lump sum to clear M's liabilities of £316,133 in total (including £150,600 of legal fees) and additional periodical payments to enable M to employ a nanny.

F's case was that:

1. M's personal debt increased because of reckless and irresponsible overspending;

2. M's legal costs, which exceeded the projected budget, have been incurred because:

a. M chose to be represented by leading counsel at every hearing, whereas F has been represented by junior counsel; and

b. M pursued a largely unsuccessful appeal against an interim maintenance order that was made.

Despite those objections, F openly proposed that he would pay £139,815 comprising two lump sums (on the basis that one of the lump sums was offset by the agreed child maintenance of £8,000 per month).

There were no issues in respect of affordability. F is a high net worth individual. In his Form E1, his net income was declared as £3.5m per annum. M originally worked as a bank cashier but was absent from work for extended periods due to a variety of health problems. She was then convicted for benefit fraud which involved a short, suspended custodial sentence and lost her job as a cashier. M then incorporated a company and has worked for the past 3 ½ years as an online influencer.

Recorder Chandler QC was critical of the 'core needs' advanced by M's solicitors. The list included a Louis Vuitton hospital bag for £2,310 and a Fendi changing bag for £1,350. The judgment noted that the solicitors' letters sent on behalf of M suggest that M was 'as interested in achieving the luxury lifestyle she had always aspired to, as much as she was focused on what would be needed for her impending maternity'.

Recorder Chandler QC described M's actions as 'spending money as if it was going out of fashion'. Her spending included significant sums on shopping (including over £4,000 in a single day on clothes, toys and groceries) and holidays. Recorder Chandler QC noted that cross-examination is rarely an easy experience and that M found it upsetting, but he found M's evidence wanting in several respects. Recorder Chandler QC concluded that he must treat M's evidence with a 'great deal of caution'. In contrast, he found F to be an 'entirely truthful witness' and concluded that wherever the evidence of the parties was in conflict, he 'must prefer the evidence of the father'.

Recorder Chandler QC concluded that M should not have acted on the assumption that the court would order F to pay all of M's debts, including amounts unreasonably incurred. It was held that a fair approach was to backdate the agreed child maintenance of £8,000 per month to the start of the proceedings. As a result, F would have to pay M a lump sum of £60,000, enabling M to clear her hard liabilities of £49,463.

F was not ordered to pay M any further lump sum to cover the debts owed by M to her elderly grandparents or her sister's fiancé. Recorder Chandler QC noted it to be 'little short of heart-breaking' that M's grandparents advanced M several thousand pounds per month for M to 'fritter it away on discretionary shopping and holidays'. The judgment describes M as behaving in an 'extraordinarily reckless way'.

In respect of M's legal costs, Recorder Chandler QC ordered that in the first instance, F should pay all of M's costs. This was subject to the following provisos:

1. Recorder Chandler QC accepted M's undertaking to pursue an assessment of her previous solicitors' costs (dependant on whether F wishes to fund it); and

2. The costs order would be subject to a claw-back provision (not to be enforced without leave), allowing F to return to the question of costs should the matter ever return to court.

Recorder Chandler QC dismissed M's application for additional maintenance payments and other lump sums, other than ordering a lump sum of £1,500 to cover moving costs, noting that 'I consider that a claim for maintenance which is earmarked for a parent's career development falls on the wrong side of the line between a claim which is for the benefit of a child (permissible), and which is for the benefit of a parent (impermissible)'.


Baker v Baker [2022] EWFC 15 (04 February 2022)

In this matter, Mostyn J considered an application for maintenance pending suit (MPS) where the paying party had provided unsatisfactory disclosure.

The matter concerned an application by the wife, Mrs Baker, for MPS. In his judgment, Mostyn J noted that the purpose of MPS is to meet immediate or current needs.

Mostyn J reiterated that the sole dispositive criterion on an application for MPS is 'reasonableness' and that where the affidavit or Form E disclosure by the paying party is deficient, the court should not hesitate to make 'robust assumptions' about the paying party's ability to pay. In those circumstances, the court should err in favour of the receiving party.

Mostyn J described the husband, Mr Baker's, disclosure in this matter as 'lamentable'. To combat the irreconcilability of the disclosure provided, Mostyn J ordered that Mr Baker's replies to questionnaire should be exhibited to an affidavit and sworn to be true.

Mostyn J's reasoning behind ordering the affidavit related to the sanctions involved. Deliberately providing false answers in an affidavit carries a charge of perjury, for which the maximum sanction is seven years' imprisonment. In contrast, the maximum sanction for making a false declaration of truth on an answer to a questionnaire is only two years' imprisonment.

Mrs Baker was claiming MPS of $23,000 (£17,000) per month. She sought to rely on the following arguments to bolster her claims:

1. The terms of a separation agreement from 2015.

2. Mrs Baker's significant investment income should not be considered as being available to meet her immediate or current needs. Instead, Mrs Baker should be entitled to roll up part of her investment income back into the principal investment assets.

Mostyn J rejected Mrs Baker's argument in both regards. Mostyn J held that Mrs Baker had not sought to enforce the separation agreement for six years, and that the MPS should therefore be dealt with entirely conventionally. In respect of the investment income argument, Mostyn J held that Mrs Baker's income 'is what it is' and must be treated as being available to meet her needs.

Ultimately, Mostyn J awarded Mrs Baker $6,500 per month in MPS without any backdating. Although the amount awarded was significantly less than that being claimed, Mostyn J held that the normal principle of costs following the event should apply. Mrs Baker was therefore also awarded costs of £15,500. This accounted for a £9,000 reduction for the work done by Mrs Baker's representatives on documents; Mostyn J described the £14,000 initially claimed as 'untenable'.


ND v LD (financial remedy: needs) [2022] EWFC B15 (10 March 2022)

This case addresses how issues resulting from a party having mental health problems, including capacity concerns, are addressed in low value financial remedy proceedings.

Husband and Wife married in 1992 and separated in 2019 (27 years). When the parties started a family, the Wife became the 'breadwinner' whilst the Husband was a 'stay at home' father. The Husband did work, but it was sporadic. The parties have three adult children. Decree absolute was pronounced on 20 September 2021, having been contested by the Husband. The Husband applied for financial remedy on 22 July 2021.

At the First Appointment, the judge directed that:

• the Husband's capacity be assessed to confirm whether he had capacity to conduct proceedings;

• a capacity to work assessment was undertaken by the Husband's psychiatrist, and

• the FDR be dispensed with and a Final Hearing listed in person.

The Husband applied for one of his adult daughters to assist him in proceedings as a McKenzie Friend, which was opposed by the Wife. A Ground Rules Hearing was listed at which the Court (1) granted permission for Husband to have a McKenzie Friend (but not his adult daughter), (2) determined the final hearing would be a hybrid hearing and (3) instructed the Husband to file written cross-examination questions to the court for use at the Final Hearing.

Following the Ground Rules Hearing, the Court received numerous concerning emails from the Husband which resulted in an ambulance and the police being called. The Husband sent an apology to the Court, but subsequently sent further concerning emails to the Court.

On a familiarisation visit to the Court by the Husband, he attended with a knife which was confiscated. As a result, the Final Hearing was ordered to be a remote hearing. At the Final Hearing, the judge was satisfied that the Husband had capacity. Various reasonable adjustments were put in place to ensure the hearing was effective including that the Wife turn off her camera when Husband was speaking, permitting the Husband to wear an eye mask during cross-examination and allowing the Husband the opportunity to have a health/support work with him when reading the written Judgement.

Financially, the main assets in the case were the Wife's combined pensions worth £141,299 (compared to Husband's £9,809). Both parties had liabilities which exceeded their small savings. The key issues for determination were:

1. whether spousal maintenance should be awarded and if so, for how long and for how much, and whether Husband should be the beneficiary of Wife's death in service benefit; and

2. the percentage for a pension share.

The Court determined that the starting point in this case was equality, as per White v White. Due to the limited assets in the case, the needs of the parties were relevant and the Court found that both their housing needs were met.

Regarding spousal maintenance, the Court found that the Husband's PIP payment did form part of his income (despite the Husband's argument to the contrary). Due to the Husband's health, the Court found that he was not able to work but did not rule out a potential earning capacity in future. His income was £1,248 per month from state benefits, and his needs were found to be £1,250. The Wife's monthly income was £3,600; she stated her needs to be £3,448 plus legal costs, and the Court considered that her reasonable needs at the very minimum would be £3,500.

In respect of maintenance, the Court considered what effect an order would have on the Husband's state benefits and the Wife's own ability to meet her needs. As a result, the Court determined that it would not be appropriate to make an order for spousal maintenance.

In respect of pensions, the Court summarised that the starting point was equality and was unconvinced by the Wife's arguments that a discount should be applied to reflect Husband's small existing pension, Wife's post-separation accrual and the fact that Husband rejected a prefer offer from the Wife. As a result, the Court ordered a pension share of 50% (at the agreed date of separation) of Wife's pension.


A v R (Financial Remedy: Pension Offsetting) [2021] EWFC B102 (08 December 2021)

The parties married in June 2011 and separated in October 2020. The Wife was 52 and the Husband was 66. The parties had three children together; their youngest is 12 and their eldest is 19. Their second child tragically died just before her 16th birthday. Their second child passed away in early 2020 and a month later, the country was put into lockdown. The parties continued living together in the FMH until September 2020 when they agreed that a nesting arrangement would be instituted so that they would take turns in living at the FMH for their youngest child (and their eldest when she returned from university). This came to end when the Husband declined to leave the property, so the Wife moved out to live in rented accommodation.

Total assets in this case without pensions and with liabilities and outstanding legal costs deducted is £933,495. Of this sum, £13,152 comes from the Wife's savings and ISAs (after deducting her liabilities). The remaining £920,268 is held in the Husband's name (after deducting his liabilities), of which £552,900 represents the equity within the former matrimonial home. The Wife's pensions were valued at £242,673. The Husband's pensions were valued at £1,181,755. The Husband retired in February 2021 where he took a tax-free cash lump sum of £224,902.99 and began drawing on his pension. A PODE report was obtained.

The Court considered the PODE report in detail and raised further questions of the PODE after closing submissions but before its judgement.

In respect of the FMH, the Court looked at the impact on the parties' youngest child as his first consideration in his judgement. As part of this, the Court permitted the late inclusion of two Child Impact Statements which had been produced from the separate Child Arrangements proceedings that had concluded 3 months previously. The Court found that the child's welfare would be served by returning to the FMH and 'it should be achieved if it could be achieved fairly'.

The Court also found that it was a mistake for Husband to refuse to leave the FMH when he did. The Court also found two instances of non-disclosure by the Husband, but that these had only limited impact on the judgement.

The parties agreed a capitalised figure of £40,000 in respect of spousal maintenance from Husband to Wife, and agreed that Wife would retain the family care. Additionally, Husband sought a sale of the FMH and for the equity to be split equally, a pension share of 36.91% to equalise income on retirement and a school fees order. Wife sought a transfer of the FMH to her, a reduced pension share of 26.703% and a further lump sum of £50k to comply with a school fees order.

In acknowledgement that the Wife had a further need above the agreed £40,000, but that a £50,000 lump sum was not justified, the Court made an overall lump sum award of £60,000 (which included the agreed capitalised figure of £40,000). No school fees order was made, and the Court determined that it was up to the parties to decide between them as parents whether can continue the private education of their youngest child.

In respect of the pension share, the Court considered the PODE's report (and follow up communications) and the PAG report in detail. In consideration of these, the Court found that a pension share of 18% in favour of the Wife should be ordered so that it does justice to the extra capital she will receive. In summary, the Court ordered:

d. A transfer of the family home from Husband to Wife;

e. A pension sharing order in favour of the Wife against the Husband's USS pension scheme as to 18% with the cost of implementation shared equally;

f.  A lump sum of £60,000 representing £40,000 for income (left out of account in my capital considerations for partial offsetting) and £20,000 as capital (included in those calculations);

g. A transfer of the family car to the Wife (included within her capital for calculations); and

h. Clean breaks.

MG v GM (MPS LSPO) [2022] EWFC 8 (01 March 2022)

In this case Wife was seeking Maintenance Pending Suit and a Legal Services Payment Order, including rent at £25,000 per month, general maintenance of £510,000 per annum and the cost of two nannies of £126,000 per annum.

The legal fees she was seeking totalled circa £900,000 (both for incurred fees and future fees), covering Hague Convention proceedings, Children Act proceedings, a jurisdictional divorce dispute and the ongoing application.

There was no agreement as to whether Wife could bring divorce proceedings within this jurisdiction and thus all financial remedy claims were stayed.

The judge ultimately warned that unless the parties could reach agreement on some matters (with this being a case "where the parties agree on nothing") the litigation looked to be "prolonged and ruinously expensive", as both parties were choosing to litigate on all fronts. The judge described the case as a "battle royale".

Husband had not paid a penny to Wife since the relationship broke down, despite her having nearly unfettered access to funds prior to this (allowing expenditure of around £43,000 per month). They enjoyed a very high standard of living. Since separation, Wife continued to spend in the region of £72,000 per month, relying on private loans from friends.

Wife estimated Husband's wealth at £100million, although many of her assertions as to Husband's business interests were disputed. He asserted that his only income was return on investments in the sum of £115,000 per annum and he indicated he, like Wife, was reliant on support from friends / family.

Wife's case was that she had no income. Husband disputed this, noting her involvement in a company which provided PPE equipment in a different jurisdiction. He believed her to be making more money than him, although Wife described her saying words to this effect as a jokey conversation.

As the judge noted, each party said the other was a "barefaced liar", each denying holding any liquid assets whilst accusing the other of having a significant amount.

The judge determined that they could not make orders without credible evidence of one party being able to access large sums of wealth or being satisfied that the disclosure of one party is so sufficient as to allow for an order to be made, with they deny is capable of being met.

Husband had provided little in bank statements (Wife had provided a full run). This was not ordered, but the Judge felt it must have been obvious that they would be necessary. It was also felt to be significant that husband cut Wife and the children off, whilst prior to that they had been fully supported.

Husband had invested funds from property sales into business interests and also invested in a PPE business and ultimately prioritised his own needs over those of his family, leaving the judge with the conclusion that "he cannot complain if she now brings an interim application." It was very unlikely that he invested this money without even being able to secure his own personal needs (per Husband's case).

Husband's problems with liquidity were not stated to be new, but he maintained the lifestyle of the family throughout, prior to cutting them off. The Judge determined that "it is for him to find a way to unlock liquidity".

The Judge noted some concerns regarding Wife's involvement in the PPE business but was satisfied she did not have access to large funds. The evidence was not there.

The Judge therefore made the following award (noting the budget of Wife to be "grossly exaggerated" and her post-separation expenditure to be "irresponsibly excessive"):

- £250,000 per annum in general maintenance (backdated to date of application, to include nanny costs)

o The Court declined to order a sum to over expenditure before Wife applied for interim provision.

- £144,000 pa for rent, backdated to date of application (being £12,000 per month)

- School and nursery fees when payable

- Husband to pay Wife's unpaid and unbilled costs, less any part thereof referable to the Hague Convention proceedings (being entirely distinct historic costs), less a deduction of 30% to reflect a notional standard basis of assessment.

- £250,000 inclusive of VAT for future legal fees in relation to the jurisdiction proceedings.

- £10,000 in respect of mediation within the Children Act proceedings, and then a balance of £90,000 payable in equal instalments, stayed until the mediation process is completed.

Staley v SSWP (CMS appeal; relief form sanctions; extend time limit) [2022] EWFC B12 (09 January 2022)

A CMS liability order was made against Stephen (litigant in person), who sought to appeal. The Respondent stated that the appeal was out of time, although did accept that the court can extend a time limit in exceptional circumstances (but stated that the circumstances here were not sufficient)

On the date the order was made, Stephen wrote to the court expressing his dissatisfaction, with a formal notice to appeal only filed outside of the time limit. He denied he had ever missed a payment and queried even being the child's father, asking for a complaint to be escalated t the highest level possible and the decision reversed.

The email went to the Court's junk box and was not responded to substantively until 13 September (the original email being dated 17 August 2022). He was told he could appeal the decision, and it was noted there was a delay to the response. Formal notice to appeal was filed within 2 days of the response being received.

Stephen sort to indicate that the original email should be treated as a valid notice of appeal, or otherwise the time limit should be extended.

The judge noted that granting there was a legitimate interest in granting relief to further the administration of justice- the impact of the liability order on Stephen would be substantial. There was no indication the failure to comply was intentional. Whilst the form is readily available on the internet and not utilised within the time frame, within 2 days of being provided with the form he had completed it.

The failure to use the correct form initially was neither serious nor significant. The respondent taking issue led to unnecessary delay and further emotional stress.

As such it was determined that a valid notice of appeal was submitted in time, with the court legitimising the email originally sent. In any event, it was found that there were exceptional circumstances that would have permitted an extension of time, with it being noted the email in response gave the clear impression that Stephen could still appeal and apply for time to be extended, and this would be successful because of the court's delay.

News

Backlash over £593 divorce fee

With the dawn of 'No-Fault Divorce', some are questioning the £593 fee currently payable in order to issue a divorce petition, given the process will be online and quicker following upcoming reforms.

David Hodson, of the Law Society's family law committee, commented as follows: "That's fine if a judge is going to spend time on it and there's paper. For an online process, [it's an] absolute scandal and should be reduced".


Guidance for Section 25 Statements: do not include personal attacks

Mr Justice Peel introduced the reported case of WC v HC (Financial remedies Agreement) by noting that the Wife's statement contained a number of personal and prejudicial matters directed at Husband, which were completely irrelevant. Statements should not include such rhetoric, designed to paint the opposing party in a negative light. Decisions will not be made on "alleged moral turpitude".

Wife's statement also failed to comply with the order that it not be over 20 pages, as it failed to comply with Paragraph 5.2 of PD27A, requiring that it be typed in a font no smaller than size 12 with 1 ½ or double spacing. This was unacceptable, as it allowed her statement to be 33% longer than Husband's.


Further divorce reform called for

The new reforms to divorce law on 6 April 2022 deal solely with divorce matters, as opposed to financial matters. However, there is pressure in the House of Lords for the reforms to go further.

During a recent parliamentary debate, Justice Minister Lord Wolfson faced questions about taking making more widescale changes.

Baroness Deech commented that "the most miserable and litigious part of [divorce] will remain: the law about splitting assets and paying maintenance... legal costs eat up chunks of the assets. Unless it is reformed, the no-fault divorce law will fail to achieve its aims."

Baroness Shackleton of Belgravia noted that under the current system no one can predict the outcome of an application accurately, as the rules are so left to the judge's discretion.

Lord Wolfson indicated that financial provision will be looked at within weeks, after the introduction of the no-fault system.


The Divorce, Dissolution and Separation Act 2020 (Commencement) Regulations 2022

These regulations bring into force on 6 April 2022 those provisions of the Divorce, Dissolution and Separation Act 2020 (c. 11) which are not already in force and will bring about the long-anticipated 'no-fault' system.


The Divorce, Dissolution and Separation Act 2020 (Consequential Amendments) Regulations 2022

These Regulations make amendments to primary and secondary legislation consequential on the Divorce, Dissolution and Separation Act 2020. 


Outdoor civil weddings and civil partnerships made permanent

Following changes implemented during the Covid-19 pandemic, outdoor weddings and licenced venues in England and Wales will be legalised permanently. The move has garnered widescale support, with support from over 90% of people.

Justice Minister Tom Pursglove MP said: "A wedding is one of the most important days in a person's life and it is right that couples should have greater choice in how they celebrate their special day.


Changes to Child Maintenance Service

New powers are being introduced that will expand the list of companies and organisations required to provide information to the Child Maintenance Service and allow communications to be done digitally rather than requiring in-person visits.

DWP Lords Minister Baroness Stedman-Scott commented: "We're bringing the service into the modern age, removing barriers that can slow down cases and prevent money reaching children."

It is hoped the reforms will allow for better enforcement of arrears, together with making the process for tracing parents and calculating maintenance easier.


Message from Mr Justice Mostyn: amendments to standard orders

With the introduction of no-fault divorce, significant changes to divorce terminology are being introduced. Petitions are now Applications; Decree Nisi is Conditional Order and Deree Absolute is Final Divorce Order.

This has necessitated changes to the standard orders, taking effect from 6 April 2022.

The message from Mr Justice Mostyn and the revised orders can be found here.


A View from The President's Chambers: March 2022

Sir Andrew McFarlane, President of the Family Division, has published the latest 'A View from The President's Chambers' entitled' Make Every Hearing Count'.

In it he discusses the current health of the system and what can be done to help improve matters and hopefully see more cases concluding and more hearings being effective. He also sets out the many and various initiatives ongoing within the family justice system in a bid for improvement, ultimately with the hope that pressure within the system.

The full document can be read here


Appointments: National Lead Judge of the Financial Remedies Court and Judge-in-Charge of Standard Family Orders

Mr Justice Peel will be appointed at the National Lead Judge of the Financial Remedies Court and Judge-in-Charge of Standard Family Orders, with effect from 26 April 2022. Mr Justice Mostyn will hand over each of these roles.

 13.04.2022