4. Financial Orders Pt 1 Flashcards
(105 cards)
1
Q
What are the two main categories of financial orders available to the court?
A
Income orders and capital orders
Income orders:
maintenance pending suit,
periodical payments,
secured periodical payments.
Capital orders:
lump sum orders,
property adjustment orders,
orders for sale,
pension sharing orders, and
pension sharing compensation orders.
2
Q
List the types of income orders available under the MCA 1973.
A
- Maintenance pending suit
- Periodical payments
- Secured periodical payments
These orders are designed to provide financial support during or after divorce proceedings.
3
Q
What are the types of capital orders available under the MCA 1973?
A
- Lump sum orders
- Property adjustment orders
- Orders for sale
- Pension sharing orders
- Pension sharing compensation orders
Capital orders address the division of assets and financial resources between spouses.
4
Q
When can spouses apply for financial orders under the MCA 1973?
A
On or after the filing of the divorce application
This applies to all financial orders except maintenance pending suit, which can be applied for earlier.
5
Q
What is the exception to when financial orders can be heard after filing for divorce?
A
Maintenance pending suit (MPS)
MPS applications can be heard before the conditional order, while other applications cannot.
6
Q
What must happen before a financial order takes effect after a divorce?
A
The final order in the divorce must be made
For pension sharing orders, they take effect 28 days after the order is made if it is later than the final order.
7
Q
True or False: Applications for provision for children can be made and heard at any time.
A
True
Such orders take immediate effect, regardless of the divorce proceedings.
8
Q
A
9
Q
What is Maintenance Pending Suit (MPS)?
A
An order for regular payments designed to provide for a spouse in the short term until the divorce is determined
The equivalent for civil partners is maintenance pending the outcome of dissolution proceedings.
10
Q
What is the purpose of an application for MPS?
A
To provide immediate financial support to a spouse before the final divorce order is made
11
Q
When can an application for MPS be made?
A
At any time after the divorce application has been filed
12
Q
When does an order for MPS terminate?
A
On the making of the final order in the divorce
13
Q
What factors are considered in determining the reasonableness of MPS?
A
- Needs
- Resources
- Marital standard of living
14
Q
What did the case BD v FD (Maintenance Pending Suit) [2014] EWHC 4443 (Fam) establish?
A
The court ordered MPS based on what was within the ‘bracket of reasonableness’
15
Q
What did the Court of Appeal state in Rattan v Kuwad [2021] EWCA Civ 1 regarding MPS?
A
The court should be pragmatic and ensure that the ultimate award was ‘reasonable’
16
Q
What are some items of expenditure that can be included in MPS?
A
- School fees
- Other immediate needs, even if not incurred every month
17
Q
Why are MPS applications rarely pursued?
A
The cost of bringing such an application is usually disproportionate to the short-term benefit
18
Q
What did Moylan J advise regarding interim hearings in BD v FD?
A
They should be pursued only where the court’s intervention is manifestly required
19
Q
Can MPS orders be used to require payment for legal services?
A
No, MPS orders cannot require payment for legal services during proceedings
20
Q
What alternative exists to MPS for funding living expenses pending a final hearing?
A
Maintenance loans offered by some family litigation funding providers
21
Q
Is Maintenance Pending Suit available for children?
A
No, it is not available for children
22
Q
What can be done to obtain periodical payments for a child?
A
- Obtain them as soon as the divorce application is filed
- Make an application to the CMS for a child maintenance calculation
23
Q
What are periodical payments?
A
Periodical payments usually take the form of weekly or monthly sums.
24
Q
To whom may periodical payments be paid according to MCA 1973?
A
Periodical payments may be paid to a spouse or, in exceptional cases, to a child of the family or to the spouse caring for the child.
25
Can periodical payments be ordered for children if the divorce application is dismissed?
Yes, they may be ordered even if the divorce application is dismissed.
26
When do all periodical payments to a party terminate?
All periodical payments terminate on the death or remarriage of the recipient.
27
What happens to unsecured periodical payments upon the death of the paying spouse?
Unsecured periodical payments terminate on the death of the paying spouse.
28
Is a periodical payments order (PPO) affected by the remarriage of the payer?
No, it is unaffected, but remarriage could prompt an application to discharge or reduce the order.
29
What may the court do regarding the term of a PPO?
The court may limit the term of the PPO to years or months to allow for independence after a period of adjustment.
30
What is the maximum age until which a PPO in favor of a child typically continues?
It typically continues until the child's 17th birthday.
31
Under what condition can a PPO for a child continue beyond their 17th birthday?
It can continue if it is in the child's interest, such as continuing with full-time education.
32
What special circumstances allow maintenance to continue beyond a child's 18th birthday?
The child is in further education or has special circumstances like a mental disability.
33
What is a secured periodical payment order (PPO)?
A device to ensure that the recipient continues to receive periodical payments even if the payer’s income fluctuates or enforcement problems arise.
## Footnote
Secured PPOs are specifically designed to provide financial support despite potential instability in the payer's financial situation.
34
How do secured PPOs work?
By charging an asset with a sum fixed by the court from which the periodical payments can be met.
## Footnote
The asset is typically income producing, such as shares or rented property, but can also be a non-income-producing asset.
35
What type of asset is typically used for secured PPOs?
Income producing assets, for example:
* Shares
* Rented property
## Footnote
Non-income-producing assets like valuable paintings can also be secured for periodical payments.
36
What happens if periodical payments are not made from other sources?
The charged asset would be liable to be sold, and the proceeds used to pay the sum secured.
## Footnote
This ensures that the recipient can still receive the payments even if the payer defaults.
37
When do secured PPOs terminate?
In the same circumstances as unsecured PPOs, except they do not terminate on the death of the payer.
## Footnote
This is a key distinction between secured and unsecured PPOs.
38
What is the exception regarding the termination of secured PPOs upon the payer's death?
Secured PPOs do not terminate on the death of the payer.
## Footnote
However, the payer's death is considered in any application by their estate to vary or discharge the order.
39
True or False: Secured PPOs can only be established with income-producing assets.
False
## Footnote
While income-producing assets are typical, non-income-producing assets can also be secured.
40
Fill in the blank: Secured PPOs are designed to maintain _______ for the recipient despite fluctuations in the payer's income.
periodical payments
## Footnote
This feature is crucial for ensuring financial stability for recipients.
41
42
What is the purpose of capital orders?
To settle disputes regarding the couple’s capital
## Footnote
This includes assets such as the family home and other properties.
43
What does the family home represent for most couples?
The main, if not the only, family capital
## Footnote
This is discussed in detail in Chapter 9.
44
What types of financial orders may be subject to capital orders?
Lump sum order, property adjustment order, order for sale, pension sharing order, pension sharing compensation order
## Footnote
These orders can pertain to various assets beyond just the family home.
45
Which case serves as a reminder regarding the court's power to make capital orders?
Prest v Petrodel Resources Ltd and Others [2013] UKSC 34
## Footnote
This case illustrates limitations on the court's ability to make orders on assets not legally owned by the parties.
46
Under which act does the court have the power to make capital orders?
Matrimonial Causes Act 1973 (MCA 1973)
## Footnote
This act outlines the legal framework for financial orders in divorce cases.
47
What must be shown for the court to make capital orders regarding assets?
One or both parties must have a legal or beneficial interest
## Footnote
The court cannot make orders on assets genuinely owned by a third party.
48
What conclusion did the Supreme Court reach in the case of Petrodel?
The company held the properties on trust for the husband
## Footnote
This allowed the court to transfer the properties to the wife based on the husband's beneficial interest.
49
Under which sections of the MCA 1973 can the court order a cash lump sum?
s 23(1)(c) and (f)
## Footnote
MCA stands for the Matrimonial Causes Act 1973
50
What are the two main reasons for making a cash lump sum order?
* To adjust the final division of the parties’ assets
* To recompense the applicant for expenses incurred due to inadequate support
51
How many lump sum orders is a spouse entitled to apply for?
One lump sum order only
## Footnote
There are exceptions for variations or discharges of payment orders.
52
Can a lump sum order be varied?
No, a lump sum order cannot be varied
## Footnote
However, there is jurisdiction to vary, suspend, or discharge instalments.
53
What may the court order if payment of the lump sum is deferred?
Interest to be paid at a specified rate
54
What is the maximum period for which an application for a lump sum payment may be adjourned?
About five years
## Footnote
This is based on the case Roberts v Roberts [1986] 2 FLR 152.
55
Why did the court refuse adjournment based on hopes of inheritance?
It was too uncertain whether and when the inheritance would occur
## Footnote
Referenced cases include Michael v Michael [1986] 2 FLR 389.
56
Are lump sum orders available for children?
Yes, but they are not common
57
In what circumstances may lump sum orders for children be appropriate?
* In high income families
* If a child has special needs
58
Can more than one lump sum order be made for a child?
Yes, more than one lump sum order can be made for a child
59
Does the Child Maintenance Service have jurisdiction to make capital awards for children?
No
60
Fill in the blank: A lump sum order may specify payment by _______.
several instalments
61
what do courts consider, re earning capacity
persons skill, age, time out of work, cost of retraining, job market
62
what if a party refuses to work (to get fo)
notional earning capacity awarded
63
What does earning capacity affect
duration of PPO / occupation of matrimonial home
64
non matrimonial assets
assets inherited or owned by one party before marriage
65
courts view as to whether an asset is pre matrimonial
overall assessment so as to achieve fairness
66
what does s25 (2)(B) mca direct courts to do
consider the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
67
ex of needs, obligations, responsibilities
food, clothing, accommodation, existing obligations (bank loans, hpa, school fees, insurance premiums)
68
under s25 (2)(b) what happens where a R has more children / new partner
delaney- court considers the extent to which financially dominant party can meet the other party's needs
69
s25(2)(c)
the standard of living enjoyed by the family before the breakdown of the marriage;
70
do courts try and preserve standard of living?
no- tries to offset decrease between parties, equally
71
s25(2)(d)
the age of each party to the marriage and the duration of the marriage;
72
why does age affect financial order
young spouse -> increased earning capacity (older spouse is less likelier)
73
what is relevant when assessing duration of marriage
cohabitation during marriage- krystman : financial provision refused for couple who lived 2 years out of 26 years of marriage
74
what if cohabitation is disputed
courts evaluate its durablity and permanence
75
general rule re short marriages
miller; macfarlane - whether /the extent to which there is a good reason to depart from equality
76
s25(2)(e)
any physical or mental disability of either of the parties to the marriage;
77
why might disabilities affect court consideration
party may have reduced/no earning capacity
may affect party's needs if care/treatment/equipment is needed
any future deterioration in condition may be considered
78
s25(2)(f)
the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
79
25(2)(g)
the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;
80
25(2)(h)
in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit F7... which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.
81
what must court consider re contributions
parties past/anticipated contributions to family welfare materially or otherwise
82
what do courts say re contributions as to home
miller v macfarlane- n bias in favour of money earner/homemaker
83
what was recognised in cowan
one party may have made a special contribution in entreprenurial flair, inventiveness, hard work
84
how has cowan rule been qualified
contributions must be truly exceptional
85
can courts consider any negative contributions
yes e v e - wife spent thousands on clothes = negative contribution
86
what does conduct amount to ?
personal misconduct during/post marriage
87
what is the general rule per OG vs AG as to conduct
courts are not a moral judge
88
what if a party dissipates assets deliberately
courts may notionally 'add back' dissipated assets
89
what must courts consider as to potential financial loss
any potential benefits (eg pension) that may be lost
90
can prospective inheritance be accounted for
only if its sufficiently certain in time/amount
91
what is the object of a clean break
end financial interdependence. settle parties' financial responsiblities towards each other once and for all
92
what does s25a(1) impose upon courts
to consider appropriateness of a clean break
93
most extreme form of clean break
order dismissing application for PP and bar against making further application s25(3)
94
what is term maintenance order
R receives maintenance for limited period to tide them over until they become financially self-sufficient
95
what if applicant fails to reach financial independence re term maintenance order
apply for extension per 31 mca prior to expiry of term
96
what is the court empowered to do under s27(IA)
deny applications for extension of term regardless of changes in circumstance
97
how is a clean break commonly achieved
through capital order- lump sum payment, dismissal of other claims
98
how can clean break be achieved re matrimonial home
immediate sale or transfer into one party;s sole name
99
3 possible ways of dealing with pension rights
off setting (adjustment of other matrimonial assets to account for pension rights)
order allowing for all/part of pension to be earmarked for other spouse (pension attachment)
subdividing pension s24B MCA
100
what does s25B PA 1995 empower courts to do
direct trustee of pension scheme to pay some or all of pension to spouse without pension rights
101
what does s25c empower courts to do
make lump sum order directing trustees to pay whole/ part when this falls due
102
how does pension sharing work
direction to transfer payment equal in value to proportion of member spouse
103
what if spouse isnt ready to decide re pension but needs financial support
s27 mca proceedings
104
basis of s27 mca
Either party to a marriage may apply to the court for an order under this section on the ground that the other party to the marriage (in this section referred to as the respondent)—
(a)has failed to provide reasonable maintenance for the applicant, or
(b)has failed to provide, or to make a proper contribution towards, reasonable maintenance for any child of the family.]
105
what can an applicant under s27 mca receive
Where on an application under this section the applicant satisfies the court of any ground mentioned in subsection (1) above, the court may make [F7any one or more of the following orders], that is to say—
(a)an order that the respondent shall make to the applicant such periodical payments, for such term, as may be specified in the order;
(b)an order that the respondent shall secure to the applicant, to the satisfaction of the court, such periodical payments, for such term, as may be so specified;
(c)an order that the respondent shall pay to the applicant such lump sum as may be so specified;
(d)an order that the respondent shall make to such person as may be specified in the order for the benefit of the child to whom the application relates, or to that child, such periodical payments, for such term, as may be so specified;
(e)an order that the respondent shall secure to such person as may be so specified for the benefit of that child, or to that child, to the satisfaction of the court, such periodical payments, for such term, as may be so specified;
(f)an order that the respondent shall pay to such person as may be so specified for the benefit of that child, or to that child, such lump sum as may be so specified;
