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In cases involving dissolution of marital relations, such as divorce, nullity of marriage or judicial separation, it is not unusual for one or both parties to claim financial relief from the other party. Such applications for financial relief are called as ancillary relief as the financial application is ancillary to the principal petition. The term ancillary relief is no longer used and the Family Procedure Rules 2010 formally substituted the term ancillary relief with the term application for a financial order. However, for the purpose of this application, the term ancillary relief is used for the development and evolution of the concept. In a recent case on ancillary relief, White v White, the House of Lords held that the underlying concept of fairness is to be used in ancillary relief cases. For this, the yardstick of equality is to be applied considering that marriage is a partnership of equals. However, in English law this notion of equality does not mean that the property or assets have to be equally distributed as between the parties. Rather, regard is had to the provisions of Matrimonial Causes Act 1973, s.25, to apply the factors given in that provision, which help the court to arrive at a fair outcome as between the parties.
This essay discusses the concept of fairness that is involved in ancillary relief applications and how the concept has evolved over a period of time, through the case law of the courts.
The term ancillary relief is used in English law, to describe the application for financial relief that is made by one or both parties after the presentation of a petition for divorce, nullity or judicial separation. The Matrimonial Causes Act 1973 is the principal legislation that is applicable in such cases and Part II of the Act, specifically, ss. 22 to 26 are the provisions related with ancillary relief. Section 22 of the Act provides that once a petition for divorce is made, or there is a petition for a nullity of marriage or judicial separation, the court may make an order for maintenance pending suit. Such an order is made to require either party to make to the other periodical payments for his or her maintenance and for such term as is
decided by the court. Therefore, this provision is related to the provision of monthly maintenance during the pendency of the proceedings with the court and it is a temporary order. Under section 23, a final order with respect to maintenance can be made by the court. Such orders may be regarding periodic or lump sum payments, and child support. The order is made after the decree of divorce is finalised by the court. Under section 24, the court may make an order regarding the property as between the parties for the settlement of the property on one of the parties or distribution of property as between them. Under this provision, the court may even make an order of sale of property for the purpose of settlement.
Therefore, as seen from above discussion, the Matrimonial Causes Act 1973, empowers the court to make finance and property related orders in relation to cases for divorce, nullity or judicial separation. Such orders can be made during the pendency of the suit as well on the finalisation of the decree. In general, it is noteworthy that ancillary relief orders cannot be made before decree nisi and cannot be effective until the passage of the decree absolute. Orders made by the court to be effective before the decree absolute are called as ‘interim orders’ and the orders that are made by the court on the making of the decree absolute are called as ‘final orders’, although, orders made for the children are always called as ‘interim orders’ irrespective of the stage when they are made. This is so because such orders can come back before the court at any time for the purpose of their revision.
The gist of such orders are that these are financial provision orders that require one party to the marriage to make payments to the other party. and the payments may be in secured (securities, bonds, shares) or unsecured, or in lump sums. Section 24 empowers the court to order the sale of property for the purpose of ancillary relief.
The powers of the court to grant ancillary relief to one of the parties, is considered to be very wide. This is so because the Matrimonial Causes Act 1973, s.25, provides a list of circumstances that the court can have regard to for the making of such order and the courts themselves have laid down that each case has to be decided individually and on its own
merits. At the same time, the Matrimonial Causes Act 1973 does not indicate the type of order that is to be made by the courts or even the guidance for the purpose of quantification of the award and this has left the courts with wide discretion for deciding such cases. For the reason that there is a distinct discretion for the courts in matters concerning ancillary relief, it is seen that many multi-million divorce cases are being carried out in England, rather than the default jurisdiction of the parties to such cases. Here, the difference in the English law has to be pointed out in order to understand how discretion arises for the courts in such cases. In other jurisdictions, the concept of matrimonial property does not usually allow the courts to distribute property as notionally both the spouses are the joint owners of such property. This is not applicable in England as the English law does not recognise the notional character of matrimonial property. Consequently, when the ancillary relief proceedings are conducted, English courts give particular regard to the individual factors of the case in order to identify which of the parties is the weaker out of the two and that party is made the recipient of the ancillary relief. Therefore, there is an avoidance of a purely ‘arithmetical approach’ in the English law, whereby the assets of the marriage are considered as one and then divided amongst the parties. Rather, concern is had to other factors as well, which would make it reasonable for the court to exercise its discretion for the benefit of one of the parties. This may sometimes lead to perverse results. An example can be seen in the case of Dart v Dart. In this case, the husband had assets worth 400 million pounds. The family owned a home in London but otherwise belonged to the United States. The husband used the English jurisdiction based upon residence, as this would allow him to avoid the default jurisdiction of Michigan state, where the assets would have been divided between him and his wife (being matrimonial property). Consequently, the ancillary relief that was given to the wife was 10 million pounds, which is not a small sum, but was a small percentage of the actual worth of the assets.
The Matrimonial Relief Act 1973, s25 (2) provides eight factors to which the court must pay
particular regard to, when considering what order to make in relation to a spouse. These factors include the following:
Furthermore, s. 25A provides that the courts are required to consider justness and reasonableness of such considerations while making the order.
The matter is basically for the court to decide and for the purpose of making such a decision, the court has regard to the following: the forms of ancillary relief order available; the factors under s.25 as discussed above; case law having bearing on the case; and the facts of the case (which may vary from case to case, therefore individual approach is required).
The case law that has developed over a period of time, and as discussed in the next section, emphasises fairness and this case law has laid down a number of principles that the courts have regard to in such cases. These principles are related to: the welfare of the minor child of the family as the first consideration for the court; establishing the needs of the parties; the need to compensate one of the parties for some reasons; encouraging self-sufficiency of the parties; emphasising fair outcomes for the parties without bias and discrimination for one party; application of the ‘sharing principle’ for assessing fair outcomes.
In the English law, the concept of matrimonial property does not really exist. Consequently, the proceedings of ancillary relief in England are not clear cut, where regard would be had to the assets, which would be divided between the two parties to the case. The actual ownership of any asset is not considered by courts as a ready resource available to it. Moreover, as far as distribution of property is concerned, the courts are to treat each case before them in an individualistic manner, therefore, courts are not bound by precedent as well. In White v White, Lord Nicoll had stated that the judge in ancillary relief claims must check his award against the yardstick of notional equality. However, equality here does not mean the equal distribution of assets as between the parties to the case, rather, fairness is to be ensured by consideration given to the factors given under the Matrimonial Causes Act 1973, s.25.
White v White remains the landmark case in the law relating to ancillary relief. Cases previous to White v White, focused on the the courts adopting the approach that in the breakdown of the marriage, the party that was financially weaker was to have her reasonable needs or requirements met and there was nothing more than that which the courts had to consider. Therefore, the basic needs were the deciding criteria for fairness justification in ancillary relief cases.
In White v White, the House of Lords said that courts should not focus on the only factor of meeting basic needs of a party as the objective of the court should be to arrive at a fair
outcome for both the parties. Having said that, the House of Lords rejected the idea of the starting point of equal division as in the opinion expressed by Lord Nicolls, such equal distribution would not necessarily be fair. Once again, the House of Lords held that the judge in each case would have to weigh up the individual facts of the case before him, against the eight factors in the Matrimonial Causes Act 1973, s.25. This means that each of the eight factors is of equal importance. Consequently, fairness would mean taking into consideration the age of the parties, their income at present or foreseeable future, health, length of marriage, lifestyle during marriage and the needs of the party that was the weaker of the two.
That equality of the assets cannot always lead to a fair outcome for both the parties to the case, was also challenged in B v B. In this case, the judge divided the assets equally between the two spouses, whereupon one of the spouses challenged the equal distribution of assets as unfair because the parties ‘superior needs’ were not taken into account by the judge before making the order. This was not accepted in the appeal against the order. The judge was found to have applied the eight factors given in the Matrimonial Causes Act 1973, s.25, in a meticulous fashion. After applying the eight factors, the judge came to the conclusion that fairness would require the equal distribution of assets. Therefore, on the appeal, the husband’s objection on the grounds of his allegedly superior needs, were discarded.
The Matrimonial Causes Act 1973, provides a general duty for the court to first decide whether it would exercise its powers under the ss.22, 23, 24, 24 A and 24B. If the court decides to exercise its powers under any of these sections, the first consideration is given to the needs of a child of marriage, if any. If there is a child of the marriage, who has not yet attained the age of eighteen years, then the first consideration by the court will be given to such a child. However, giving first consideration to such a child does not mean that overriding consideration has to be given to the child. This was held by the court in Suter v
Suter. Here, the court held that the first consideration is to be given to the welfare of the child, if any and the task of the court is to arrive at a financial outcome which is fair and just as between the two spouses. Thus, the court may give consideration to the welfare of the child in deciding ancillary relief in such a manner that the child’s suitable accommodation within reasonable travelling distance from school is given effect to, without making it the paramount consideration for the purposes of ancillary relief.
In Macfarlane v Macfarlane, the court held that the Matrimonial Causes Act 1973 only provides limited guidance as to how the courts should deal with applications for an ancillary relief. The courts have the discretion to deal with such applications by having regard the underlying principle of fairness between the parties. When the marriage comes to an end, the principles of fairness would require that the parties’ assets be divided mainly to make provision for their financial and housing needs. For this the court is required to consider the ages of the parties, their earning capacity at present and in the future, standard of living of the family, children under the age of 18 years, and disability in the family, if any.
In Charman v Charman (No. 4), the court observed that s.25 provided a discretionary regime for the court to follow and such regime may be used by the court to “ensure flexibility in tailoring outcomes in individual cases”.
There may be a case where the spouses have a pre-nuptial agreement as between themselves. In other jurisdictions, such as the United States, such pre-nuptial agreements are to be given effect to, however, in the English law, the existence of a pre-nuptial agreement does not affect a court’s general duty to consider the eight factors provided under s.25 of the Matrimonial Causes Act 1973. The pre-nuptial agreement may be one of the factors considered by the court but it is not the only factor to be considered. In K v K (Ancillary Relief: Prenuptial Agreement)the court had regard to the pre-nuptial agreement as one of the factors that was to be considered for ancillary relief, but the court also
considered other factors amounting to conduct under s. 25(2), such as, the wife’s understanding of the pre-nuptial agreement, whether she received advice and whether she entered into the agreement voluntarily.
Radmancher v Granatino is a seminal case in which the Supreme Court discussed the validity of prenuptial agreements between the parties to the marriage. The court took a very conservative view to the pre-nuptial agreements, holding that such agreements may be valid if there were no other vitiating factors, such as unfairness of such agreements. There are a number of cases that have come before English courts related to the pre-nuptial agreements between the parties. In F v F (Ancillary Relief Substantial Assets), the court held that pre-nuptial contracts are of limited significance in English law. In N v N (Foreign Divorce), the court agreed that such pre-nuptial contracts may be relevant considerations in ancillary relief proceedings. In S v S (Staying Proceedings), the court held that Wilson J considered that pre-nuptial agreements may become a norm, especially in marriages where the existence of such agreement may be a deciding factor for the marriage.
Under s.25 the factors that are given are not necessarily to be followed in a hierarchical order.
The income and capacity of the parties are the primarily important considerations before the court. The periodic payments or the lump sum payment to be made by the court would depend to a great degree on the ability of the party to sustain themselves. Consequently, the weaker of the two parties becomes able to get the financial relief under the ancillary relief proceedings.
The court may sometimes have to consider the ability of the non-working spouse to get a job and be self-sufficient when it is considering the ancillary relief proceedings. Here, the court may be made to consider the reasons why the individual gave up work (if working before), there may be children in the marriage who are not as of yet of school going age and that may become a consideration for deciding that the individual, usually the wife, is not
ready to go back to work in order to sustain herself as she would be required to look after the children at home. This would then become an important consideration for the court to allow periodic payments or lump sum payment in her favour that would allow her to remain at home with her children. In fact, for each individual case, the circumstances may vary.
When the ancillary proceedings are considered, the courts are empowered to assess the property that is subject to be made part to such proceedings. For this purpose, all property can be considered by the court and be valued at the market price on the date of hearing.
In the English law, the concept of fairness in ancillary relief proceedings, demands that the courts apply their discretionary powers in treating each individual case on its own merits. The courts do not simply apply an arithmetic formula to divide the property and assets equally. Rather, the notions of equality apply to consider the peculiar circumstances of each case, in order to give relief to a party that is the weaker out of the two. The concept of fairness has evolved over a period of time in ancillary proceedings to allow pre-nuptial agreements where valid and in conjunction with the other factors given in s.25 of the Matrimonial Causes Act 1973. Therefore, at all time, these factors are to be considered by the court for the purpose of arriving at a fair outcome. In White v White, the court has particularly mentioned the need for the courts to always consider the underlying values of fairness and equality as between the two parties.
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