Resolving the financial issues in divorce (9)

3. A more difficult (and frequent) problem in these proceedings is when information is requested of a third party. This very often does cause difficulties. A husband, for instance, may have left the matrimonial home and be co-habiting with another woman in another property. Indeed, they may intend to marry in the course of time. It may be that the husband is being asked for maintenance, for example, for the children of the marriage and the wife’s solicitors will almost certainly ask in this case for details of the co-habitee’s income. This often causes outrage because the third party, not unnaturally, sees no reason to disclose her income to anyone and she does not see why she should contribute to the maintenance of her partner’s children.

In point of fact, in this type of application the courts have no jurisdiction to compel a third party such as this to pay anything to the wife. She is not a party to the action between husband and wife and certainly cannot be forced to pay anything for the benefit of someone else’s children. Nevertheless, her means are relevant and are taken into account – albeit indirectly. The husband will have certain outgoings in respect of his new home – mortgage payments, for example. The co-habitee will almost certainly be contributing to these (at least, she will if she has any income) and to that extent she will be freeing more of the husband’s income and making it available for the maintenance payments. It would probably do no good in these circumstances for the co-habitee to say she was contributing nothing because a court would very likely take the view that she should.

To the third party a distinction like this might seem to be a distinction without a difference (and it has to be said that many people find it difficult to understand) but in this indirect way the courts will take a co-habitee’s resources into account. Similarly, they can compel the person who is a party to the action to disclose what he does know about the resources of his co-habitee. The Family Proceedings Rules also empower the district judge either before or during one of these financial applications  to order the attendance of any person for cross examination and/or to disclose documents such as pay slips or bank statements. This can apply to a cohabitee. In practice this means that the resources of people such as co-habitees usually are disclosed even if it is under protest. This often does cause bad feeling and a sense of outrage but the information can usually be prised out one way or another.

4. Sometimes in an application for financial orders in divorce one party to a divorce stands to inherit a substantial amount in the foreseeable future – an only son of wealthy and elderly parents, for example. This is not usually taken into account in any financial settlement between husband and wife as part of a divorce settlement. The reason for this is that anyone can change a will and there are no guarantees that anyone will inevitably inherit under a will. The overwhelming likelihood in the example mentioned above is that the only son will inherit from his parents in due course but there is no guarantee of this. Parents and son may quarrel and the parents may leave their wealth to the proverbial cats’ home. Unlikely though this may seem, it is the reason why an expectation of an inheritance is not generally taken into account by the courts.

The situation would be quite different if the parents had died and their estate was being administered. In the latter case there would be a certainty of benefit and it would only be a question of time before the estate was administered and the money distributed. In rare circumstances it is also possible for the provisions of the will of a living person to be taken into account. For instance, an elderly mother may have made provision in her will that everything in her substantial estate be left to her only son who is the husband in the divorce proceedings. The elderly mother may also have been in a nursing home for many years and be suffering from acute Alzheimer’s disease with no hope of recovery. Providing this latter fact can be proved the mother is mentally incapable of altering her will and therefore it is a certainty that her son will inherit under the existing will. Such cases are unusual but they do occur.

The more important point to remember from the above is that if one of the parties to the marriage does have expectations of inheritance it is in that party’s interest to seek a divorce sooner rather than later if the marriage has irretrievably broken down before the expectation becomes the reality. Once there is a certainty of receiving the inheritance (for one of the reasons given above) the courts can and do take the inheritance into account in dividing the matrimonial assets. Most people find this a very difficult pill to swallow.

5. People often ask whether the other party’s “conduct” entitles them to receive more and, indeed, it is worry over this which often prevents a party receiving a divorce petition based on unreasonable behaviour or adultery from returning the Acknowledgment of Service to the court indicating that he/she will not be defending the divorce. People are frightened that they will in some way be penalised financially if they do so.

In fact, in the vast majority of divorces the “conduct” of one or other of the parties to the divorce or the reasons for divorce have no impact whatever on any financial settlement which may be awarded by the courts. It is true that Section 25 of the Matrimonial Causes Act does say that the conduct of one of the parties is something which the court is entitled to consider in making any financial order but the provision is qualified by the words, “if that conduct is such that it would in the opinion of the court be inequitable to disregard it”. In practice these words have cut down the scope of the section considerably and there is an abundance of case law which shows that conduct will only be taken into account where it would obviously be quite wrong not to do so. In the great majority of cases the other factors laid down by Section 25 are very much more important – the needs of the parties and of the children in particular.

To give an indication of the sort of case where conduct may play a part it was decided in one case in 1987 that where a wife had connived in her husband’s suicide attempts (he was a manic depressive) with the object of getting her hands on as much of his property as possible it would be wrong to ignore such conduct and the wife’s financial provision was reduced. Notice, however, that even in a case such as this the conduct has to be proved (which may be difficult) and the wife’s share was reduced rather than eliminated.

Where this type of consideration is thought very frequently by clients to apply is in the case of adultery where the “innocent” party obviously thinks it quite wrong that the “guilty” party should have any share of the proceeds of sale of the matrimonial home, for example, in order then to go and set up home with the third person. All cases are different in that it is hard to tell whether the matrimonial home might not be needed as the home for any children of the family, for instance, but the fact of the matter is that “simple” adultery would almost always be ignored. There would have to be important factors over and above “simple” adultery which would outweigh the effect of the other Section 25 considerations and that is very rarely the case. Basically, knowing whether “conduct” is likely to be taken into account in any given case depends on knowing the decisions of the courts and understanding the principles behind them.

Spouses involved in divorce in England always want to know on what basis the UK divorce law decides financial issues between husband and wife if the Courts have to decide the issue. Indeed, this is what is at the heart of most divorce cases. If there is a dispute it is more likely than not to be about money whether that is about periodical payments for a spouse, dividing the equity in the former matrimonial home or divorce and pensions. In fact, the relevant principles are set out in Section 25 of the Matrimonial Causes Act 1973 which, essentially, reads:-

”It shall be the duty of the court in deciding whether to exercise its powers ….. to have regard to all the circumstances of the cases, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen.

25 (1) It shall be the duty of the court in deciding whether to exercise its powers …. to have regard to all the circumstances of the case including the following matters, that is to say –

(a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future;

(b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c) the standard of living enjoyed by the family before the breakdown of the marriage;

(d) the age of each party to the marriage and the duration of the marriage;

(e) any physical or mental disability of either of the parties to the marriage;

(f) the contributions made by each of the parties to the welfare of the family, including any contribution made by looking after the home or caring for the family;

(g) …the value to either of the parties to the marriage of any benefit (for example, a pension) which … (by reason of the divorce) ..that party will lose the chance of acquiring;…”

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