Financial Orders Flashcards
The Factors: s.25(1)
Section 25(1) MCA 1973:
– Court must have regard to all the circumstances of the case…
– …giving FIRST consideration to the welfare of any child of the family aged under 18.
The Factors: s25(2)
– s.25(2)(a) - financial resources:
* Capital assets: e.g. houses, monies in bank accounts, shares, investments, business assets and pension funds.
* Income: Current and future.
* Mortgage raising capacity: 3 times gross salary.
The Factors: s.25(2)(b) needs, obligations and responsibilities:
Capital needs: e.g. a house.
* Income needs: Outgoings e.g. mortgage/rent, council tax, utilities, food, clothes PLUS luxuries, depending on the value of the case (but be careful not to “overegg the pudding”!)
The Factors: s.25(2)(c) Standard of Living
-Only in HNW cases that both parties will be able to continue to maintain the same standard of living as before the marriage breakdown.
* Court will try to ensure that any drop in standard of living is borne equally by the parties.
The Factors s.25(2)(d): age of parties; duration of marriage:
- The younger the parties are and the shorter the marriage, the more likely it is that they will be expected to achieve financial independence.
- When a long marriage breaks down, the parties are likely to be older and their finances very much entwined.
Clean break less likely.
The Factors: s.25(2)(e) -Physical or mental disability:
-Disability might impact on a party’s earning capacity…
-… and increase their financial needs.
The Factors: s.25(2)(f) - Contributions:
-Marriage is a partnership, so unequal financial contributions will not usually be relevant.
-White v White [2000]: Outlawed discrimination between the contributions of the “breadwinner” and the “homemaker”.
The Factors: White v White [2000]: Lord Nicholls:
“There is one principle of universal application which can be stated with confidence. In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles”.
The Factors: s.35(2)(g) - Conduct:
-Only relevant if “obvious and gross”.
-Adultery is not relevant conduct.
-s.25(2)(h) - Any benefit lost
The Factors: s.25(A): Clean break
– Mandatory for court to consider whether a clean break is appropriate.
– Severs financial ties between the parties.
– Most likely to be achievable:
* Short marriage;
* Parties of a similar financial standing; or * High net worth cases.
The Factors: Case Law: White v White 2000
- Case law:
White v White [2000]: Two key principles:
– No discrimination between parties based on their roles (discussed previously).
– Judges should check their decision against the ‘yardstick of equality’ and be able to justify any departures.
Orders
Categories of financial orders:
* Capital orders
* Income orders
* Pension orders
Capital Orders: FMH
1) Sale and division
2) Transfer into one party’s sole name
3) Mesher order
4) Charge
Capital Orders: FMH
1) Sale and division
Might be appropriate where:
- Unfair to transfer FMH to one of the parties;
- Not financially viable to keep up mortgage payments; or
- Neither party wants to remain in the property
2) Transfer
* Might be appropriate where there are sufficient assets in the pot to compensate the other party.
* Often party with whom children will live will want FMH transferred into their sole name.
3) Mesher order
* Deferred sale of FMH.
* FMH held in joint names pending sale.
* One party has the right to occupy FMH.
* Property sold on agreed trigger date, e.g. children reaching majority. Proceeds divided.
* Enables one party to stay in FMH without depriving other of their beneficial interest.
4) Charge
* Property transferred into one party’s sole name with a charge in the other’s favour.
* Property sold on agreed trigger date, e.g. children reaching majority.
* Enables one party to stay in FMH without depriving other of their beneficial interest.
Capital Order: Other assets
Possible orders:
* Current owner keeps
* Transfer from joint names into one party’s sole name
* Transfer from one party’s name into the other’s
* Sale and division of proceeds
* Lump sum