Decree Absolute: Divorce & Cohabitation in the UK

Although the parties’ marriage only came to an end in September 2020, they had already incurred costs of nearly £1.3m as a result of their litigation in this jurisdiction (in addition to litigation in ‘State A’). There were five matters formally listed before Nicholas Cusworth QC (“the judge”), sitting as a Deputy High Court Judge, although he was only in a position to determine applications made by the husband (“H”) against the wife (“W”) for interim maintenance and for a Legal Services Provision Order (“LSPO”). Interim maintenance W’s means did not play a central part in determining H’s applications. However, a schedule of assets disclosed on W’s behalf disclosed cash and property assets in her name worth over £29.2m, although it was asserted that some of this was held on trust for others and that W’s resources were worth £9.6m. W said her salary was £109,000 net in 2019 and £124,000 net in 2020. W accepted that spending from the family’s joint account during the marriage topped £20,000 pcm. Her offer of interim provision for H provided for him at the rate of £170,000 pa, to include H’s housing costs. The judge took into account the jurisdictional dispute between the parties, including the fact that there was a dispute in relation to forum and that there was a post-nuptial agreement executed in State A, under which H was disentitled to any provision. However, the judge considered that until the determination as to jurisdiction was made, it was important that a fair and proportionate financial balance was maintained between the parties. Housing needs The parties did not agree the cost of the marital status quo. H produced a letter from a local estate agent (which had not been produced in a way that complied with any of the requirements in FPR Part 25) purporting to identify the rental value of the former family home in London as £5,500 pw, whereas W said the rental value of flats in the area was not much more than £2,000 pw. Given the limited weight which could be attached to H’s letter, the judge placed more reliance on the property particulars he received from each party. Although H had previously asserted that he was homeless, he disclosed at the hearing that he was paying rent ‘somewhere in England’. In the absence of any actual evidence, the judge could make no assumptions, and simply sought ‘to provide a sufficient amount to enable him to rent somewhere reasonable in the same area as the family home whilst the various different strands of this litigation are gradually teased out’ [15]. Both sides produced property particulars in West London. W had identified properties with rent between £1,600-£2,000 pw, and H between £4,500-£6,000 pw (although he also produced particulars with rent between £3,500-£3,600 pw, to try to show the range of the market, but he did not accept that those properties were sufficient for his needs). H rejected all the properties put forward by W as being, in various ways, less commodious than the former family home. The judge considered that the properties H had put forward were ‘well in excess of what is reasonable in these circumstances’ [19]. He noted that he ‘need not strive to replicate exactly the standard of living enjoyed in the marriage, but rather I should provide the husband with a reasonable amount, in all of the circumstances of this case, which will enable him to house close enough to the former family home to facilitate such direct contact with his children as the court in due course determines is in their best interests, and in a property of such condition that there will not be a significant perceivable gulf between the standard of his accommodation, and the home where the children live with their mother’ [18]. Even H’s cheaper properties ‘have the potential to represent an upgrade on the family home’ [19]. Ultimately, therefore, the judge concluded that reasonable provision was somewhere between the less expensive properties provided by H, and the range provided by W. With a budget of £2,500 pw, or £11,000 pcm, the judge was satisfied that H ‘can find entirely appropriate accommodation in the area of London where all of the parties’ particulars are to be found’ [20]. Income provision H sought, in addition to his £23,500 pcm claim in respect of rent, £21,703.50 pcm to meet his living expenses. W had offered him £5,500 pcm. One of the reasons for the gulf between the parties was H’s initial presentation of spending from the family’s joint account in the two years up to the parties’ separation. H said an analysis showed outgoings of £1,415,187 during the period, or £60,000 pcm (increasing to £73,000 pcm if the period after the national lockdown from April 2020 was excluded). However, W’s team identified that around half the transactions on the account were internal transfers, so the true figure was £29,237 pcm over the whole period (or £33,460 pcm excluding the period of lockdown). Once school fees, professional fees, tutoring and fixed property costs were excluded, the figure was c. £21,000 pcm (and £500 more or less depending on whether the lockdown period was included). The judge accepted W’s figures. H also argued that there was additional spending not directed through the joint account, e.g. in cash, through W’s company, or on credit cards. However, the judge was satisfied that he had ‘a sufficient picture of the level at which the parties lived during the marriage from the evidence before me fairly to assess the husband’s interim budget in the way that the authorities require’ [22]. The judge excluded or reduced several of the figures H had claimed he needed in order to pay for, among other things, a live-in nanny (despite the fact he did not work and there was no order in place for any arrangements for him to see the children), and restaurant, theatre, cinema and concert visits and holidays (despite the Covid-19 lockdown). The judge considered that none of those figures could currently be justified at the levels claimed, but accepted that they were ‘likely to become more important in coming months’ [24]. H also sought additional capital provision as part of his interim award, which was ‘unusual’, and ‘only usually justified in circumstances where an urgent need can be demonstrated that cannot wait until final determination of capital issues between the parties’ [25]. In the circumstances, the judge proposed to deal with the need for criminal legal costs as part of H’s claimed LSPO provision, since he was not satisfied that the other interim capital provision sought was of sufficient urgency to merit any additional award, save for £1,000 which was needed for dental treatment and which would be factored into the judge’s overall assessment (as would H’s set-up costs in any newly rented property). The judge queried how to deal with H’s interim application ‘at a time when due to an indefinite national lockdown, current expenditure is curtailed, but where costs will foreseeably be increasing by later in the Spring as measures will likely ease’ [26]. He decided to allow the sum of £9,000 pcm by way of interim provision for H, which initially would allow him to spend any short-term surplus on other items, but ‘should not require further adjustment pending final determination of the various issues in this case’ [28]. This was ‘only slightly less than one half of the discretionary spend that I have seen for the family of four during the marriage, and less than one third of the total spend including school fees which the mother will be continuing to pay’ [28]. It would allow H to have available ‘sufficient to provide for leisure time with his children insofar as this becomes possible and is determined to be in their best interests’ [28]. The total amount of interim provision was therefore £20,000 pcm, in addition to which W was ordered to provide as required for H’s rental deposit (which would be on account of H’s eventual entitlement in these proceedings). The judge was satisfied that this was affordable for W. Legal Services Provision The parties agreed that a LSPO should be made under section 22ZA of the Matrimonial Causes Act 1973. In addition to the quantum of such an award, there was a separate issue about whether or not it was appropriate to order some provision to meet some or all of the costs in the proceedings which H had already incurred. At the beginning of the hearing, H had claimed both costs incurred with his current solicitors, and also with the previous firm which had acted for him. However, by the end of the hearing H did not press the position in relation to his previous firm’s costs. The judge noted that the question for the court was ‘one of reasonableness’ [36], and that there is ‘a balance of reasonableness to be struck in each case, on its own facts’ [43]. The judge considered the statement of Holman J in LKH v TQA AL Z (Interim maintenance and costs funding) [2018] EWHC 1214 (Fam) at [23] that s.22ZA ‘is looking forward to the obtaining of legal services, not backwards to legal services which have already been obtained’. He agreed that that must always be borne in mind, although he also noted that ‘the reasonable availability of future provision may well be affected by the degree to which existing outstanding bills to the firm then instructed have been cleared or reduced’ [43]. The judge stated that ‘each case must be determined on its own facts, applying the criterion of reasonableness to what is a question of funding, and not any determination of ultimate costs liability’ [43], and that another factor to be considered must be that ‘significant costs may be run up between the issuing of the application for an order and the hearing when the appropriate provision is determined’ [44]. In this case, those costs were around 25% of the outstanding bill H owed to his current solicitors. The judge further bore in mind that the costs H sought were to fund the substantive jurisdictional arguments between the parties in relation to the suit and to jurisdiction under the Children Act 1989, as well as interim issues in relation to the children. It was agreed between the parties that the costs of any subsequent financial proceedings could not fairly be awarded before the questions of jurisdiction had been determined. The judge also reminded himself that one of the issues within the financial proceedings was that W asserted the existence and validity of the post-nuptial agreement effected in State A. Although the judge could not assess the force of W’s arguments, he bore in mind that ‘if the husband in the event receives only an attenuated award, full recovery of the amount of any LSO provision may not be practicable if the basis of the award is predicated only upon need, however assessed’ [48]. W had run up a total of £705,944 since mid-October 2020, while H claimed that the full amount of the historic costs he owed to his solicitors was £589,672. The judge stated that ‘it is clear that the husband’s costs expenditure has not been by any measure disproportionate when compared to that by the wife’ [50]. W proposed paying H £560,000 plus VAT, i.e. a total of £672,000, plus £10,000 per mediation session. This offer was put forward on the basis that a loan would be taken against the security of the family home in the sum of £1.5m, which could be extended and from which each party would take their costs on a pound for pound basis. Although the judge was satisfied that it was reasonable to charge the matrimonial home to raise the funds to be provided for H, he did ‘not have sufficient information about the wife’s financial circumstances to accept that it is appropriate for her to be able to reduce the available liquidity in this jurisdiction to meet her own costs by the same amount at the same time’ [52]. The pound for pound element of the charge was therefore not accepted. In relation to the historic costs, the judge did not consider it reasonable for W to make no contribution to the outstanding amount H owed to his current solicitors (a little over £394,000). However, neither was the judge persuaded that all or even the majority of the costs of £291,781 which H had run up with his current solicitors by the time he made this application needed to be discharged to achieve a fair balance between the parties. On the other hand, the £103,000 incurred by H after the application was made, but before the date of the hearing, which could be seen as incurred in light of the application, could be taken as being more fully within the potential ambit of the application. No award was made in relation to the costs outstanding to H’s former solicitors, since the judge was not satisfied that the discharge of those costs was reasonably required to enable H to obtain appropriate legal services. Overall, the judge ordered W to pay £200,000 towards H’s outstanding costs (just over half the current bill owed by H to his solicitors). He was satisfied that that amount, coupled with adequate provision going forward, would ‘be sufficient to enable [H’s solicitors’] continued representation of their client without undue tension in the relationship, and would therefore be reasonable, and appropriate to procure legal services for the husband’ [55]. W was ordered to make ongoing payments at the rate of £150,000 pcm (a further £750,000), paid from February until June 2021, on the basis that the jurisdiction hearings would take place in June 2021. The judge was satisfied that this was ‘a reasonable amount having regard to the rate at which both parties have been spending in the litigation to date, and the issues between them and their complexity, which of themselves justify the top level representation currently being employed by both husband and wife’ [57]. Henrietta Boyle, Barrister at 1 Hare Court You may also be interested in: Dictionary of Financial Remedies 2021 (pre-order) The Dictionary of Financial Remedies is a unique reference guide to the key concepts, cases and practice of financial remedies. An ideal quick reference for when you are in court, conference or mediation and written in a style that will appeal to family lawyers, mediators and other non-lawyers involved in financial remedy proceedings. This 2021 edition is fully updated to include changes and developments in the law from the last twelve months, including those that have occurred as a result of the Covid-19 pandemic. New entries include: Privilege; Release from Undertakings; Executory Orders; Setting Aside and Remote Hearings. PRE-ORDER

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Home > Articles Financial Remedy Update – February 2021 Rose-Marie Drury, Principal Associate, Mills & Reeve LLP considers the important news and case law relating to financial remedies and divorce during January 2021. Rose-Marie Drury, Principal Associate, Mills & Reeve LLP. As usual this update is provided in two parts: News • AdviceNow has published a guide to helps parties understand pension assets and how they can be valued and split on divorce or dissolution – see New help for divorcing couples as they are urged to consider sharing their pensions and A survival guide to pensions on divorce . • The House of Commons Library has published a briefing paper looking at the effect of Brexit on divorce proceedings: click here. • HMCTS has updated guidance for those who use the online FR services: click here. • The President of the Family Division has published The Family Court and COVID 19: The Road Ahead 2021 which updates the framework for the operation of the Family Court during the pandemic: click here. • The Courts and Tribunals Judiciary has published an organogram charting the national and regional structure of the Financial Remedy Court. For the organogram, click here. • The Rt Hon Lady Black of Derwent retired as a Supreme Court Justice on 10 January 2021. The President of the Supreme Court, Lord Reed, made a short video to pay tribute to her work and to say a fond farewell to her on behalf of everyone at the Supreme Court. • Among various amendments to the civil aid eligibility criteria, the existing cap on the amount of mortgage debt that can be deducted from a property's value has been removed. This means all mortgage debt will now be deducted which in turn means that more individuals will now pass the financial eligibility criteria for civil legal aid. This change came into effect on 28 January 2021. For more details, click here. • The Ministry of Justice has published a webpage bringing together guidance for legal professionals about what they need to do from 1 January 2021. The page includes guidance for legal professionals about family law disputes involving the EU, published on 30 December 2020. For the guidance page, click here. For a page bringing together guidance for people who are involved in UK-EU cross-border family law disputes and explaining what needs to be done from 1 January 2021, click here. Cases Rattan v Kuwad [2021] EWCA Civ 1 The Court of Appeal gave judgment following the Wife's appeal against an order of HHJ Oliver. The parties had married in 2009 and separated in 2019. The Wife subsequently commenced divorce and financial remedy proceedings in April 2019. The Wife applied for maintenance pending suit. The application was heard by a deputy district judge in October 2019 and the Husband was ordered to pay MPS of £2,200 pcm. The Husband appealed that order. HHJ Oliver allowed the appeal, finding that the DDJ had not carried out a critical analysis of the Wife's needs, school fees had been included in the order and there had been an assumed reduction in the mortgage instalments of £600 pcm. Whilst the judge was sure the Wife needed maintenance he did not consider he was in a position to decide what order should be made in place of the DDJ's order. The Wife appealed. Giving the lead judgment for the Court of Appeal, Moylan LJ commented that the application for MPS did not require any extensive analysis but could be determined justly with a succinct summary and consideration of the relevant factors. The substantive question was whether the judge was right to decide the DDJ had failed to undertake a critical analysis of the Wife's needs. Moylan LJ found that the DDJ had undertaken a sufficient analysis and had not been wrong to include school fees as part of the maintenance order. The DDJ's order for maintenance was restored. The court was required to undertake an analysis which was sufficient to be satisfied that the award was reasonable. In some cases that might require a detailed examination of a budget but in others it would be immediately apparent whether the listed items represented a fair guide to income needs. The fact that some items might not be incurred every month did not mean they should be excluded for the purposes of determining maintenance nor was it necessary for an applicant to provide a list of income needs distinct from that in Form E.  Moylan LJ concluded that it would be appropriate for a court determining any appeal of MPS to also determine what alternative order, if any, should be made. AA v AHM [2020] 2 WLUK 743 The Wife and Husband were Kuwaiti. They married in Kuwait in 2002 and had three children together. They subsequently separated and divorced in Kuwait with a final judgment in financial remedy proceedings being given in 2019. The parties owned three properties in London in joint names. In February 2019 the Wife brought proceedings under the Trusts of Land and Appointment of Trustees Act 1996 for a declaration that the parties equally owned the beneficial interest in the properties and applied for an order for sale. Those proceedings were ongoing and the Husband was defending that application. The Wife then applied under Part III Matrimonial and Family Proceedings Act 1984 (Part III MFPA 1984) in June 2019 in relation to two of the properties which had been former matrimonial homes. The matter came without notice before HHJ O'Dwyer who granted permission for the Wife to bring her application to consider whether permission should be granted to the Wife. The Husband applied to set aside the order, claiming that HHJ O'Dwyer did not have jurisdiction to grant permission, that only a High Court Judge had jurisdiction, that the properties were not matrimonial homes and the Wife was misleading/there were deficiencies in her application.  Moor J found that HHJ O'Dwyer had jurisdiction to grant permission. In general an application for permission could be heard by judges of the Financial Remedies Court, which would usually be a District Judge but might be a Circuit Judge. They should only come before a High Court Judge if they were exceptionally complex. The allocation directions in the Family Court (Composition and Distribution of Business) Rules 2014 state proceedings under sections 12 and 13 MFPA 1984 where one of the parties did not consent to the grant of permission or the parties consent to the grant of permission being granted but did not consent to the substantive order sought should be dealt with before a judge of High Court level. However, in Barnett v Barnett [2014] EWHC 2678 (Fam) Holman J had considered that routine applications for leave should be made to a local district judge who would then decide whether an application to the High Court was necessary. Such a procedure was sensible, saved time, costs and inconvenience. Holman J had recommended that r8.26(a) FPR 2010 should be amended to remove 'district judge', which had been done. Further, paragraph 25 of the President's Guidance: Jurisdiction of the Family Court: Allocation of cases within the Family Court to High Court judge level and transfer of cases from the Family Court to the High Court 2018 had highlighted generally proceedings under s12 and s13 Part III MFPA 1984 should be allocated to a district judge for both permission and the substantive decision unless the case had some special feature or complexity.  Moor J was satisfied that the Wife had established a prima facie case that two of the properties were matrimonial homes. It was open to the Husband to contend at a final hearing that they were not matrimonial homes but his contention did not justify setting aside permission for the Wife to bring the application. Whilst the Husband made various criticisms of the Wife's application there was no 'knockout blow' justifying set aside. AZ v FM [2021] EWFC 2 The parties were married for 15 years before divorcing. They had one child together who was age 19 at the time of the hearing. A final order was made in financial remedy proceedings in June 2011. In 2017 the Husband applied to vary the child maintenance he paid. DDJ Butler made an order capitalising the Husband's child maintenance payments. The Husband appealed. HHJ Everall QC refused permission to appeal on paper. The Husband applied for an oral permission hearing and the matter came before Mostyn J. Mostyn J considered that the statutory provision was clear. The lump sum had not been ordered under s31(7A) or (7B) Matrimonial Causes Act 1973 (MCA 1973) since that applied only to a party to the marriage and only following the discharge of a periodical payments order. He considered the lump sum had been ordered under s31(5) MCA 1973. Whilst there was a prohibition in s31(5) MCA 1973 that, subject to certain exceptions, the court could not on a variation application impose a property adjustment order in favour of a party to the marriage or a child of the family nor could it impose a lump sum order in favour of a party to the marriage, there was no such prohibition on it imposing a lump sum in favour of a child of the family. Mostyn J was satisfied the jurisdiction to order a lump sum existed and the trial judge had been entitled to exercise it in the case but commented it was a 'very rare bird indeed'. On the facts, a lump sum was justified because of the combination of incessant litigation on which the Husband was found to have thrived, repeated defaults by the Husband and the age of the child and relatively short period until the maintenance liability expired. FRB v DCA (No3) [2020] EWHC 3696 (Fam) In March 2020 Cohen J handed down judgment following the final hearing in the financial remedy proceedings. Cohen J's order had the effect that the Husband was to pay the Wife £64 million comprising of the matrimonial home mortgage free (£15 million) and a lump sum by instalments totalling a further £49 million. The lump sum was to be paid as follows: a) repayment of the mortgage (approximately £12 million) on the matrimonial home within six months and then transfer of the property; b) £30 million to be paid within six months of the date of the order; c) £19 million to be paid within 18 months of the date of the order. The order provided for interest to be paid at the rate of 4% pa or such higher rate as the court subsequently ordered in the event of late payment of b) or c) and that if b) was not paid on time the whole balance would become payable. The Husband was further ordered to pay certain bills at the matrimonial home, periodical payments to the Wife at the rate of £720,000 pa to be reduced pro rata by the proportion of the amount of the £49 million that had been paid and an order for child maintenance and school fees. The Husband appealed and was refused permission in August 2020. In September 2020 the Husband then applied to vary the quantum and timing of payments in the order or alternatively for the lump sum to be set aside and re-quantified on a Barder event basis. In November 2020 the Wife applied for an increase in her periodical payments to £2.5 million pa, interest on the three unpaid lump sums together and an increase in the rate of interest to 8% and a legal services order in the sum of £1.4 million. The parties' applications came back before Cohen J. Cohen J dismissed the Husband's applications. Cohen J found that there was a lack of any evidence submitted by the Husband to show a fundamental change in his worth and he noted the Husband had not provided trading figures, profit and loss accounts, underlying documentation or valuations. Whilst some of the sectors the Husband and his family were involved in, such as hotels and airlines, would have been negatively affected by the pandemic, his interests were varied and it was not obvious there was a collapse in his fortune. Cohen J further noted it was important to consider the long term and most commentators believe at some stage in the next couple of years the world economy will be back to where it was prior to the pandemic. Dealing with the Wife's applications, Cohen J found in the current economic climate it would be excessive to increase the rate of interest above 4%. He confined payment of interest to the second lump sum as the Husband was continuing to pay the mortgage on the matrimonial home (and the Wife was therefore not being kept out of that element of the award) and the non-payment of the third lump sum had not yet arisen. Cohen J found that in principle the Wife's periodical payments should be increased to give the Husband incentive to make payment. The Wife received a legal services order to enable her to pay her unpaid costs (with credit being given to the Husband against the final payment of the lump sums), to fund proceedings between the parties over artwork and Children Act proceedings. Ralph v Ralph [2020] EWHC 3348 (QB) Morris J heard an appeal by the Claimant against an order dismissing his claims for a declaration of beneficial interest in a property owned in the parties' joint names and an order for sale under the Trusts of Land and Appointment of Trustees Act 1996. The Claimant was the Defendant's eldest son. The property which was the subject of proceedings was the Defendant's home where he lived with his wife and two of their children. The Claimant had lived in the property between 2003 and 2007 but had not lived there since. The parties purchased the property in joint names in 2000. The TR1 recorded that the parties held the property on trust as tenants in common in equal shares. The Claimant's position was that was an accurate reflection of the parties' intention. The Defendant's case was that the declaration was made under a common mistake, the parties never intended joint beneficial ownership in equity and the Claimant was only included on the title to assist him in securing a mortgage. The Claimant made no contribution to the purchase price or mortgage. The Claimant sought a declaration that the property was held by the parties as tenants in common in equal shares and an order for sale. At first instance the judge dismissed the Claimant's claim. The Claimant appealed. Morris J found that although the Defendant had not formally pleaded a claim for rectification or rescission, there was no requirement for a formal claim for such to be made for the court to make an order for the same. It was only necessary for a vitiating factor relating to the express declaration of trust to be asserted, which the Defendant had done. Whilst the Defendant had not provided a properly particularised counterclaim impeaching the express declaration on the basis of mistake, the judge was entitled to exercise his discretion to allow the Defendant's defence to be considered. Morris J found that this approach was just on the facts of the case and the Claimant was not prejudiced by the lack of a formally pleaded counterclaim.  Morris J held that at the time of purchase the parties had agreed joint legal ownership but had reached no agreement as to beneficial ownership. The correct approach therefore was to reflect this by rectification, deleting the express declaration of trust from the TR1. In the absence of an express declaration of trust it was for the court to decide the parties' beneficial interest based on an implied trust. The judge at first instance had found that, on the basis of the parties' common intention constructive trust, the Claimant had no beneficial interest and the Defendant was the sole beneficial owner. The Claimant's appeal was dismissed. Kleinhentz v Harrison and another [2020] EWHC 3439 (Ch) The Claimant and First Defendant lived together for most of the period between 1990 and 2011. The Claimant alleged that they had been in a relationship together, which the First Defendant denied. In 2005 the First Defendant purchased a house in his sole name using money provided by his father. When he asked the Claimant to leave in 2011, the Claimant asserted a beneficial interest in the property. The parties subsequently entered into a written agreement under which, subject to certain conditions being met, the Claimant would receive a payment of £250,000 and withdraw his claim of a beneficial interest. It also provided for the First Defendant to have in place a Will leaving a gift of at least £250,000 to the Claimant which was not subject to conditions. No money was paid under the agreement. The property was subsequently sold and part of the proceeds went to purchase a property in the name of the Second Defendant (who by that time was in a civil partnership with the First Defendant). The Claimant alleged that the agreement had been varied and the First Defendant should have paid him £250,000 when the property was sold. Robin Vos, sitting as a Deputy High Court Judge, found that the parties had been in a long-term committed relationship from 1990 to sometime between 2005-2008. After that they were good friends. It could not be inferred from the parties' conduct that the Claimant should have a beneficial interest in the properties purchased by the First Defendant. The written agreement in 2011 was a valid binding agreement and remained so, including the term regarding the First Defendant's will.  However, the requirement for the First Defendant to pay the Claimant a lump sum of £250,000 was conditional upon the First Defendant receiving sufficient funds from his father after the date of the agreement to do so. The proceeds of sale of the property did not satisfy the condition because although the funds to purchase the property had come from the First Defendant's father they were received prior to the 2011 agreement. The agreement had not been subsequently varied. The Claimant's claims were dismissed. Oberman v Collins and another [2020] EWHC 3533 (Ch) The Claimant and First Defendant were in a long term relationship between 1995 and 2015. The Second Defendant was a company in which both parties were shareholders. Over the course of their relationship, the Claimant and First Defendant had built up a portfolio of properties which were held in a mixture of their sole and joint names and in the name of the company. The ownership of the properties was often dependent upon financial advice. The Claimant sought (i) a declaration that she was entitled to 50% of a number of properties held by the Defendants either under a common intention constructive trust or a partnership and (ii) relief under sections 994 and 996 of the Companies Act 2006 on the grounds of unfair prejudice. Tom Leech QC, sitting as a Judge of the Chancery Division, held that all of the properties, regardless of legal title, formed part of a single portfolio in the common ownership of the parties. There was an express agreement between the parties that it had been their common intention that the portfolio would be held jointly and equally and the Claimant had relied on that to her detriment (making financial contributions and working unpaid). The common intention doctrine could apply to a fluctuating portfolio of properties provided the requirement of a valid trust were satisfied. If that was wrong, then a common intention constructive trust could be established by inferring that the parties intended to acquire that property in equal shares from their express agreement about the portfolio and their subsequent conduct in the use of rents and sale proceeds. There is no rule that common intention trusts arise only in the domestic context although it is more difficult to establish these trusts in a commercial context. 11.2.21

New research from the Marriage Foundation think tank has found that the number of  married couples in the UK considering divorce has shrunk below pre-...

Our articles are written by experts in their field and include barristers, solicitors, judges, mediators, academics and professionals from a range of related disciplines. Family Law provides a platform for debate for all the important topics, from divorce and care proceedings to transparency and access to justice. If you would like to contribute please email editor@familylaw.co.uk. Spotlight Children and Same Sex Families Children and Same Sex Families: A Legal Handbook More info View All A day in the life Of... Read on How cohabiting couples should protect their finances Date:28 JAN 2021 A cohabitation agreement Historically, cohabitation agreements, sometimes known as “no-Nups”, were frowned upon as they were seen to encourage sexual relations outside of marriage. Thankfully, times have moved on and that’s no longer the case. The general view is that such agreements are enforceable if they deal with cohabitees’ property and affairs, and provided they are entered into freely with full information. Often, disputes between cohabitees following separation relate to what was or wasn’t intended, for example, in relation to the property in which they live. Having a clear record of the cohabitees’ intentions in a cohabitation agreement can avoid expensive disputes about those issues Jointly held assets Contrary to popular opinion, there’s no such thing as a ‘common-law spouse’ in English law. Simply living with someone doesn’t create joint assets. Rather, any bank accounts or investments held in joint names will be considered joint assets, as will any real estate held in joint names. Equally, any items purchased using joint funds, or to which each cohabitee contributed towards the purchase price, will likely be joint assets. Things get tricky where an asset is held by one cohabitee or purchased by one cohabitee (e.g. a property), but the other cohabitee says there was an understanding that it would be shared jointly. In that scenario the court can find itself having to decide who is or isn’t telling the truth. That can be a long and expensive process. It is therefore always better for any such agreements to be recorded in a cohabitation agreement. That agreement could, for example, also record that all assets will not be joint property unless held in joint names. That can remove any element of doubt. Article continues below... Family Law Awards 2020 Shortlist announced - time to place your vote! View product Court of Protection Practice 2020 'Court of Protection Practice goes from strength... £289.99 View product Jackson's Matrimonial Finance Tenth Edition Jackson's Matrimonial Finance is an authoritative... £289.99 View product Shared property Cohabitees falling out about co-ownership of property is an all-too-frequent occurrence and a complicated area of the law. If you are simply paying ‘rent’ it is very unlikely you will have any rights in the event of a break-up. Paying rent assumes that the property is owned by one party and the other is paying for the ability to live there. That is different to co-ownership. If it is intended that a property is co-owned, then it is absolutely vital that is recorded in a cohabitation agreement or deed of trust. A valid declaration recording the intentions of the cohabitees regarding co ownership will, in the vast majority of cases, be held to be binding and will likely avoid the need for expensive court proceedings if things turn sour. Your pension A cohabitee will not have any right to share in your pension during your lifetime. You are free to nominate them as a beneficiary of your pension if you pass away, but doing so does not create any rights should you subsequently (prior to death!) change your mind. If you do wish your cohabitee to receive a survivor’s pension after your death, you should always make sure you nominate them appropriately using a form from your pension provider. Your Will If you are living with someone, it is vital your will records your up-to-date intentions regarding your estate. For example, depending on how you own any jointly owned property, your will should record what should happen to your share in the event of your death. It should also appoint any guardians for your children when you are not there to care for them. Having an up-to-date will properly recording your intentions can avoid the nightmare scenario of your loved ones arguing over your estate after your death. It is an unfortunate fact that, if you pass away without a will, your cohabitee will not have an automatic right to share in your estate. Taxes Every individual has an inheritance tax (IHT) nil-rate band, currently set at £325k. Further, spouses do not pay IHT on assets given to them upon death by the other spouse. For married couples, the nil rate band is transferrable between them meaning that the surviving spouse may have a nil-rate band available to them of £650k. However, those rules do not apply to cohabitees. As a result, any value in an estate over the nil-rate band left to the surviving cohabitee will be taxed at 40% (if exemptions are not available). That can cause very real problems if the surviving cohabitee does not have liquid funds to pay the required tax. Tax planning advice should always be sought. This article was first published at www.stewartslaw.com and is reproduced with permission. Categories: Articles Related Articles Authors: Samantha Hickman 13 SEP 2019 Authors: Samantha Hickman 16 SEP 2019 Authors: Andy Hayward 22 SEP 2019 Authors: Lucy Greenwood Feriha Tayfur 21 APR 2020 21 JAN 2021

Mostyn J was concerned with an appeal made by AZ (“H”) against a judgment of DDJ Butler (“the trial judge”) which: (a) refused H’s application to vary downwards periodical payments made for the benefit of the child of marriage; (b) capitalised those periodical payments; and (c) dealt with the division of the remainder of a fund previously set aside to satisfy the parties’ liability for capital gains tax (“the CGT fund”). In January 2020, HHJ Everall QC granted H permission to appeal the order of the trial judge on a single ground which challenged the jurisdiction of the court to capitalise periodical payments for child maintenance (Ground 2). He refused H permission in respect of two other grounds, which asserted that the trial judge was wrong (a) to draw adverse inferences as to his level of income, and (b) to divide the CGT fund as he did. H renewed orally his application for permission to appeal on Grounds 1 and 3 before Mostyn J. Background H and FM (“W”) were aged 57 and 55 respectively. Both were well-respected architects. H lived in the USA and held a professorship at Princeton University (although he said during the hearing that the future of his position was uncertain, because he was in a dispute with the university). W lived in London, but held a professorship at Harvard University. The parties were married for 15 years, and had enjoyed a good standard of living together. The child of the marriage, M, was 19 and studied at a London university. Outside term time, M lived with W, and she had had very little contact with H for some years. H had remarried in 2012, and had two young children with his second wife. H said in his skeleton argument and in his oral submissions that the eldest of these children had an incurable illness, which was life-limiting and required extensive care. H said that there were significant costs associated with the care and treatment, which could increase in the future. Litigation history Since their separation, the parties had been engaged in lengthy and costly litigation, not only in the Family Court but also in the Chancery Division. Moylan J (as he then was) made a final order in the financial remedy proceedings in June 2011, and there were parallel commercial proceedings arising out the division of the parties’ joint architects’ practice which did not settle until 2014. Further, W had to bring enforcement proceedings in November 2017 following H’s failure to pay periodical payments for M from June 2017, although those were not pursued once H cleared the arrears. Order of Moylan J The order of Moylan J set out that: · H was to pay periodical payments to W for the benefit of M at the rate of £1,700 per month until M turned 18 or ceased full time tertiary education (to first degree level and to include one gap year), whichever was the later or until further order. · When M was in tertiary education, provided M continued to make her primary home with W during her vacations, H was to pay one-third of the maintenance to W and two-thirds directly to M. · The parties agreed and undertook to pay 50% each of M’s school and university fees, and reasonable extras. In October 2017, H applied to vary Moylan J’s child maintenance order downwards. The final hearing took place before the trial judge in July 2018. Order of the trial judge The order of the trial judge set out that: · The parties agreed that the terms of the order were intended to meet M’s maintenance needs through to the end of her first degree, including a gap year, and they therefore agreed not to make any further application to the court or to the CMS for further financial provision to meet M’s maintenance needs beyond the terms of the order. · The parties agreed and undertook to pay 50% of M’s university tuition fees to the end of the first degree. · W agreed and undertook to the court that in the event that she sought any further or additional child maintenance for M (beyond the sum provided for in the order), any such payment which H had to make to M or W would be repayable in full by W to H within 14 days of receipt. · The CGT fund and interest accrued were to be paid to W, H was to pay W a lump sum of £59,200, less 50% of the CGT funds, in discharge of the obligation to pay periodical payments for the benefit of M (a total of £52,104), and H was to pay W’s standard costs, with a payment of £17,500 on account. · Within seven days of receipt of those funds, W agreed and undertook to pay the sum of £44,000 into an account in M’s name, and the balance plus 50% of the CGT funds into an account in her own name, to be used solely for the purpose of sustaining M in tertiary education. The lump sum and costs orders of the trial judge were stayed pending the outcome of the appeal, and the original order of Moylan J remained extant pro tem. H had only sporadically paid the periodical payments due under the order of Moylan J, and by his own admission he was in breach of the order. H had failed to pay the sum due in January 2020, and had failed to pay anything since March 2020. H said that in any event, he would seek to issue a further application to vary the periodical payments. Renewed application for permission in respect of Grounds 1 and 3 Ground 1 stated that the trial judge concluded that H failed to disclose material documents engaging pillar (i) and (ii) of D v D [2015] EWHC 1393 (Fam), and that this unjustly influenced his findings in relation to H’s income, which resulted in him erroneously accepting W’s evidence in relation to her income and M’s needs, and prevented him from varying the maintenance in H’s favour. HHJ Everall QC held that the trial judge correctly directed himself as to the legal principles, and was entitled to make the findings he made on the evidence before the court. Ground 3 stated that the trial judge’s judgment was inconsistent when it came to the lump sum which H was ordered to pay W. HHJ Everall QC held that H had no real prospect of successfully arguing that the trial judge fell into error in his calculation of the lump sum. Mostyn J noted that the right to seek an oral renewal hearing is provided for in FPR r. 30.3(5), and that that right can only be taken away where a High Court judge or a Designated Family Judge refuses permission to appeal and certifies the application to be totally without merit (r. 30.3(5A)). However, the existence of that right contrasts with the position in the Court of Appeal, where the decision of a single judge on the papers is final and may not be orally renewed unless the single judge permits such an oral hearing (CPR r. 52.5). Mostyn J stated that ‘[i]n my opinion, appeals under FPR Part 30 should be aligned as soon as possible with those in the Court of Appeal…It is a waste of precious judicial resources for a permission application to be run twice, once on paper and once orally’ [23]. In February 2020 H applied for an oral renewal hearing. Williams J directed that the application would be heard by Mostyn J alongside the substantive appeal on Ground 2. FPR PD30A para 4.14 H had not complied with FPR PD30A para 4.14, doubtless because in July 2020 he had elected to act in person. Para 4.14 requires the advocate for a represented appellant to file with the court four days before the appeal hearing a brief written document informing the court and the respondent of (a) the points which the appellant proposes to raise at the hearing, and (b) the reasons why permission should be granted notwithstanding the reasons given for the refusal of permission. Mostyn J stated that it is ‘a highly important provision’ and said that he could discern ‘no good reason why it should not extend to appellants who are self-represented’ [25]. Mostyn J also noted that para 4.14(b) clearly signifies that there is an obligation imposed on an appellant at an oral renewal hearing to demonstrate a good reason why the decision of the single judge refusing permission on the papers was wrong. He referred to his decision in R (Kuznetsov) v Camden LBC [2019] EWHC 3910 (Admin), where it was held that the test under CPR r. 3.3(5) was that the court should give due weight to the decision of the judge who dealt with the matter without a hearing and should be able to identify a good reason for disagreeing with their decision. Mostyn J could ‘identify no valid reason why this approach should not be applied where an oral renewal hearing is sought following a refusal of permission to appeal by a single judge on the papers’ [27]. It made no sense that Mostyn J ‘should redetermine the application de novo without giving due weight to the previous decision’ [27]. Grounds 1 and 3 In respect of Ground 1, Mostyn J noted that appeals against primary factual findings by the trial judge are always ‘extremely difficult to pursue’ [28]. H complained that the trial judge’s adverse findings against him concerning his duty of disclosure were ‘prejudiced’, but Mostyn J held that having reached the conclusion that H was in breach of his duty of candour, the trial judge was ‘plainly entitled to rely on it in reaching his conclusion as to the likely scale of the husband’s future income’ [31]. The case did ‘not come close to the high standard that needs to be demonstrated in order to disturb findings of fact’ [32]. Permission to appeal on Ground 1 was refused, and Mostyn J certified that the renewal application in relation to that Ground was totally without merit. Similarly, Mostyn J refused permission to appeal on Ground 3, and certified that the application was also totally without merit. What the trial judge had intended was ‘abundantly clear’ [33]. Further, H’s argument that the whole of the CGT fund should be applied as a credit against the lump sum liability was ‘completely untenable’ [34]. To do so would be to treat the whole fund as H’s property, which was not a finding the trial judge made or could have made. Ground 2 Ground 2 stated that the trial judge made a fundamental error of law by capitalising child maintenance when there is no jurisdiction under the Matrimonial Causes Act 1973 (“MCA 1973”) to do so. Mostyn J noted that the commutation lump sum was not ordered under s. 31(7A) and (7B) of the MCA 1973, since a lump sum under those subsections can only be made in favour of a party to the marriage, and only following the discharge of a periodical payments order, either immediately or after a specified period. Although the commutation lump sum may have been payable to W, it was for the benefit of M. Subsections (7A)-(7H) were inserted into s. 31 of the MCA 1973 by the Family Law Act 1996, and took effect on 1 November 1998 after being passed by Parliament following a campaign by professionals to amend the statute to give the court power to capitalise a periodical payments order and thus to bring about a clean break. The barrier to a commutation of spousal maintenance had been s. 31(5) of the MCA 1973, a provision which was first enacted in s. 9(5) of the Matrimonial Proceedings and Property Act 1970. Mostyn J stated that ‘[w]hen construing a statutory provision in order to determine its jurisdictional reach the first port of call is a textual interpretation which asks what the words reasonably and fairly meant at the time that they were enacted’ [44]. He considered that ‘the words used in the statute as enacted in 1970 have a very clear literal meaning’, which is that ‘on an application to vary a periodical payments order the court may not make a property adjustment order either in favour of a party to the marriage or a child of the family’, and that ‘on such an application to vary the court may not make a lump sum order in favour of a party to the marriage but there is no prohibition on it doing so in favour of a child of the family’ [45]. Where the application is to vary a periodical payments order in favour of a child of the family ‘then there is power to award a lump sum’ [45]. That is what s. 31(5) permits. Further, the power to award a commutation lump sum in favour of a child of the family ‘exists even where the court has made a previous lump sum award in favour of that child’, since s. 23(4) of the MCA 1973 provides that the court may make an order for a lump sum in favour of a child on more than one occasion. Mostyn J admitted that such an order for a commutation lump sum in 1970, or thereafter, would have been extremely unusual, but stated that ‘the rarity of such an order is of no assistance in answering the question whether there is jurisdiction to make it’ [48]. Although s. 31(5) of the MCA 1973 has been amended, ‘[t]he key phrase “and no order for the payment of a lump sum shall be made on an application for the variation of a periodical payments…order in favour of a party to a marriage” remains intact’ [49]. H’s arguments and analysis H gave three reasons as to why capitalisation of child maintenance is said not to be ‘allowed’: 1. A child maintenance capitalisation, unlike a spousal maintenance capitalisation, is not watertight. The child cannot be prevented from coming back for more. 2. What is to happen if the predictions about the child’s future all turn out to be wrong? 3. Child maintenance is meant to be variable in accordance with the current circumstances prevailing referable to the child’s needs and the payer’s income, and if there is a capitalisation this cannot be achieved. Mostyn J stated that although ‘[w]hen the court is considering capitalisation of spousal maintenance it has to make predictions about the future’, ‘one is generally able to make some predictions with a reasonable degree of accuracy’ (e.g. that the sun will rise tomorrow) [51]. He noted that in capitalisation cases, difficulties in probabilistic assessments of what might or might not happen in the future ‘are not of themselves anything to do with whether the power to commute exists’ [52]. Ultimately, Mostyn J concluded that none of H’s arguments bore upon, or said anything about, the existence of the jurisdiction of the court to discharge a child maintenance order and to award a lump sum in lieu of future periodic maintenance. The ‘clear words of s. 31(5) of the 1973 Act permit such an order to be made’ [56]. Ground 2, and the appeal itself, was therefore dismissed. However, Mostyn J made clear that although the jurisdiction exists, ‘it will remain a very rare bird indeed’, and that in this case, the combination of incessant litigation, H’s repeated defaults in respect of his maintenance obligation, and M’s age and the relatively short period until the maintenance liability expired ‘all militated strongly in favour of a capitalisation and the ending of financial links between the parties’ [58]. In ‘the overwhelming majority of cases, however, the risks and uncertainties inherent in capitalisation will lead the court, where it has jurisdiction, to make, or continue, a traditional order for periodic payments’ [58]. Furthermore, ‘capitalisation could only properly be considered where the 1991 [Child Support] Act could not apply’ [58]. Calculations Although the appeal was dismissed, Mostyn J did correct some errors in the computation of the lump sum. The court ‘clearly has power to correct computational or other factual error whether pursuant to the slip rule or its inherent jurisdiction’ [59]. Fresh evidence H had sought to tell the court about the illness of his daughter, and also about his dispute with Princeton University. In his order of January 2020, HHJ Everall QC had provided that if H wished to rely on fresh evidence, he had to make a formal application to do so. No such application to adduce fresh evidence was made, even though at that time H was represented by very experienced solicitors. In the circumstances, it was ‘unprincipled and unreasonable for the husband to seek a stay pending a further variation application based on informal indications of changes of circumstances where he has chosen not to comply with this very clear order about adducing fresh evidence’ [72]. Mostyn J therefore declined to award a stay. Costs Mostyn J ordered H to pay W’s costs on the standard basis. Although H’s pursuit of totally meritless grounds, and his failure to negotiate, amounted to conduct for the purposes of CPR r. 44.2(4) and (5), Mostyn J did not consider that H’s pursuit of the substantive appeal, nor his failure to negotiate, took the case ‘out of the norm’, as is required for costs to be awarded on the indemnity basis. There is no specific provision in FPR PD28A imposing a duty to negotiate in appeal proceedings, and so, while the failure of H to negotiate reinforced his liability for standard costs, it did not elevate his liability to indemnity costs. W was awarded 75% of her actual costs, summarily assessed. Henrietta Boyle, Barrister at 1 Hare Court Now available: Standard Family Orders: Volume 1 (2nd Edition) The Standard Family Orders Handbook is the approved source of guidance to the official orders with a Foreword from the former president of the Family Division, Sir James Munby. HHJ Edward Hess, Deputy National Lead Judge, Financial Remedies Courts, provides invaluable commentary on when and how to use each order, with a brief description of its purpose. The text of the orders is also interwoven with useful practice points from HHJ Hess where relevant. In addition, the colour coding in the approved orders has been reproduced so that you can easily see what to amend when drafting your orders. This second edition contains the latest version of each order, with all the revisions necessitated by the amended FPR 2010 Rule 9.27 (which significantly changed the way costs should be dealt with) and the new FPR Part 37 and PD 37A, together with fully updated commentary from HHJ Hess where relevant. ORDER YOUR COPY TODAY

The case concerned child support for a child born in 1989. Although the child had been living with the father by 2005, arrears had accumulated before then, for which the father was now being pursued. A regular deduction order (RDO) had been made in the sum of £150.26 per week, against which the father sought permission to appeal, albeit later than allowed under the rules. HHJ Mark Rogers granted relief from sanctions, saying that it was important for this case to be resolved on its merits rather than as a result of a procedural default. Permission to appeal was also granted. He found that the rigorous test laid out in s 41E of the Child Support Act 1991 had not been satisfied: the arrears had not been extinguished and were capable of recovery. But in his view, no attention had been paid to the impact of relevant events in 2007, including an apparent declaration that the mother had withdrawn her authority for the arrears to be collected. The appeal was allowed. Making a new decision, he found that the points against making an RDO substantially outweighed those in favour, and so he declined to make one. Judgment, published: 22/01/2021 Topics Child Support Children Share

The second episode of The London Legal Podcast is now available. This episode looks at Cohabitation Agreements and is presented by Jacqueline Major and Bharti Shah, both experienced family law solicitors with over two decades of experience in all family law matters.

Inheritance tax, marriage allowances and sharing assets can all help you and your partner's finances. Plus - what happens if you break up?

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Background The appellant husband ("H") and respondent wife ("W") had married in 1989. They had two children together. In 2004, they bought a property in London ("the matrimonial home"), which was registered in H's sole name. The family lived in the matrimonial home until after the breakdown of the marriage. H moved out in 2014, but W and the children remained living there until it was sold in March 2019. Following divorce proceedings, decree nisi was pronounced in January 2015. In June 2016, the parties reached a compromise, and a consent order ("the order") was approved by Holman J in September 2016. Decree absolute was granted in October 2016, shortly after the order was made. The order provided forthwith for the sale of the matrimonial home (upon the joint instruction of the parties), and for W to be paid a series of three lump sums, to be made up in part from the proceeds of sale of the matrimonial home. Payment of the lump sums would be in full and final settlement of all W's claims arising out of the marriage. Indeed, the order was drafted to provide that the lump sums would not be adjusted for any reason, and included a paragraph that any change in relation to H's companies would not be capable of being a Barder event entitling either party to set aside the order. There was no specific provision in the order in relation to the occupation of the property pending sale, although in the 'Agreements' section of the order, provision was made that W would discharge the outgoings on the matrimonial home with immediate effect, and that H would give W at least 24 hours' notice before visiting the matrimonial home. Neither clause had an end date. In the 'Undertakings' section of the order, W undertook to remove the protective notices which had been registered in her favour on the matrimonial home. When the order was made, the parties were confident that the matrimonial home would sell quickly. The asking price was in excess of £7m. However, as a result of the Brexit referendum in June 2016 and its effect on the high-end property market, the matrimonial home remained on the market until March 2019, when it sold for £5.9m (approaching £2m less than the original asking price). W and the children moved out upon its sale. Possession proceedings In March 2017, H served a notice on W requiring her either to vacate the matrimonial home within four weeks, or alternatively to pay rent at the rate of £5,000 per week for her continued occupation. A further notice was served in October 2017. Upon W declining either to leave or to pay rent, H issued proceedings in the County Court seeking possession of the matrimonial home and damages for trespass in the sum of £600,000. The proceedings came before HHJ Gerald ("the first instance judge"), who had to determine (i) whether the effect of the order was to permit W to occupy the matrimonial home until sale, and (ii) whether, whilst she remained in the property, W's financial obligation was limited to the payment of outgoings. The first instance judge decided those issues in favour of H, declaring that from the date of the order, W occupied the matrimonial home as a gratuitous licensee. He held that, as H was the sole beneficial owner of the matrimonial home, W was a gratuitous licensee even before the approval of the order. W was granted permission to appeal the order of the first instance judge. The first appeal The appeal was heard by Fancourt J ("the judge"). The judge allowed the appeal and set aside the declaration made by the first instance judge. He made a fresh declaration that, upon its true interpretation, the meaning and effect of the order was to permit W to occupy the matrimonial home until the sale of the property, with payment by her of the outgoings of the property, but with no obligation to pay occupation rent pending sale. H was granted permission to appeal the order made by the judge. The second appeal The issue on appeal was whether the judge erred in deciding that the reasonable reader, having all the background knowledge which was available to the parties, would have concluded that it was the intention of these parties that W would be permitted to remain living in the matrimonial home, rent free, until it was sold. If she was not, then H would succeed in his claim for damages. King LJ commented that Lady Hale's confirmation in Macleod v Macleod [2010] AC 298 that a financial remedy order is not a contract remains good law, although she noted the comments of Sir Stephen Richards in G v B [2016] EWCA Civ 161 that the principles applicable to the construction of a consent order are the same as those applying to a commercial contract. King LJ stated that '[i]t follows that the principles of construction to be applied in determining the wife's rights of occupation, if any, are the same regardless of whether the court is dealing with a contract or an order' [22]. It was also noted by King LJ that H could have sought possession of the matrimonial home by virtue of a combination of powers under s.24A MCA 1973, which permits a court at any time after the making of an order for the sale of a property to make such 'consequential or supplementary provisions as the court thinks fit', which, by FPR r.9.2(2), include an order for possession to 'any other person'. There is also the power to vary a s.24A MCA 1973 order for sale under s.31(2)(f) MCA 1973. Although it was undoubtedly the case that the County Court had jurisdiction to determine this application, notwithstanding that the order with which the court was concerned was not a contract, in the judgment of King LJ 'any dispute as to the interpretation of a financial remedy order made following the breakdown of a marriage should be put before the specialist Financial Remedy Court or a High Court Judge of the Family Division. The Family Court not only has the power under the Matrimonial Causes Act 1973 to resolve any conflicts which may arise in relation to orders that it has made, but also the expertise that comes from exercising their specialist jurisdiction' [23]. King LJ felt that the route taken by H by way of possession proceedings was inappropriate, and that the proper course would have been 'for him to have made an application for enforcement or variation of the Order not to the County Court but to the Family Court' [23]. Asplin and Arnold LJJ, however, preferred to leave open the question of the propriety of bringing a claim for possession in the County Court. Was W a gratuitous licensee? The judge held that the conclusion of the first instance judge that W was a gratuitous licensee had no proper legal foundation, and that if it was correct, then W would automatically have become a trespasser (and liable to pay damages) on decree absolute being pronounced. The judge also held that the first instance judge was wrong to conclude that W was a gratuitous licensee before the order was made, since until decree absolute, W had statutory home rights to remain in occupation. King LJ, with whom Asplin and Arnold LJJ agreed, agreed with the judge that there was 'no factual foundation for saying that the wife was granted a licence, and consequently upon the husband's case the wife became a trespasser upon the granting of decree absolute and liable to pay damages' [38]. She also stated that the solution to the case 'does not essentially lie in an examination of the legal ownership of the property and whether the wife was in law a gratuitous occupier, but upon a conventional construction of the Order conducted in accordance with the well-known judgment of Lord Neuberger in Arnold v Britton [2015] AC 1619 at [15]' [39]. Construction of the order In his judgment, the judge stated that in Arnold v Britton Lord Neuberger indicated that the meaning of a relevant clause, in that case in a lease, had to be assessed in the light of: 1. The natural and ordinary meaning of the clause; 2. Any other relevant provisions of the contract; 3. The overall purpose of the clause and the contract; 4. The facts and circumstances known or assumed by the parties at the time the document was executed; 5. Commercial common sense; and 6. A disregarding of subjective evidence of the parties' intentions. The judge also cited the judgment of Lord Hoffman in Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 110. In that case, Lord Hoffman said that the meaning of a contract was to be assessed by reference to 'what a reasonable person, having all the background knowledge which would have been available to the parties, would have understood them to be using the language in the contract to mean'. H's position H submitted that factors such as the joint conduct of the sale, the agreement that he would give 24 hours' notice before attending the matrimonial home, and the transfer of all the standing orders for the running costs of the property to W did not indicate a right on the part of W to occupy the property. He argued that the judge failed to take into account the impact of the undertakings W gave to remove the notices registered in her favour against the matrimonial home. He also said that the fact that the property was in H's sole name, together with the combined effects of the clean break provisions included in the order, demonstrated that upon a proper construction of the order, W had no rights of occupation after the granting of decree absolute. W's position W stressed the importance of looking for signposts in the order. She argued that the reasonable reader would have known that the matrimonial home was bought in 2004 and was the main family home, that H had left in 2014, leaving W and the children in occupation, that the parties had come to an agreement in June 2016, the terms of which would lead forthwith to the sale of the matrimonial home upon the joint instruction of the parties, and that from the date of the agreement, H would cease to be responsible for all the outgoings. W queried why the parties would have gone to the trouble of swapping all the standing orders into her name if she could have been required to leave the property at short notice at the behest of H. Furthermore, at the date of the order, the established living arrangements were that W and the children had been living in the house for almost two years. In order to bring the order into effect, it was necessary to apply for decree absolute, and the fact that W applied for decree absolute had no relevance to her continued occupation of the property under the order, but was simply the necessary vehicle in order to put the agreed order into effect. King LJ agreed with W that those factors were relevant terms of the order which shed light on the intentions of the parties, and favoured the judge's interpretation of the order. The question remained whether W's undertakings to remove the notices, or the fact that H was the sole beneficial owner of the property taken with the clean break provisions, undermined the judge's conclusions. Analysis King LJ set out that Lord Hoffman's approach required the court to consider what a reasonable person, having all the background knowledge which would be available to the parties, would have understood the contract to mean. In her view, that background knowledge would include the fact that this was an order made in financial remedy proceedings which had been approved by a judge who would have considered all the circumstances of the case, including the s.25 MCA 1973 factors. King LJ was 'entirely satisfied that the judge's judgment neither sets a precedent nor implies a licence to occupy into the Order' [50]. The factors to be taken into account when construing a contract were, as agreed between the parties, those found in Arnold v Britton. The judge had carried out this exercise, and 'unless he had fallen into error in the interpretation of the Order which had led him to conclude that "the terms of the order strongly indicate that the parties' agreement had the effect that the appellant was entitled to stay in occupation until the house was sold", there was no necessity for him to move on to consider whether he could properly imply a right of occupation as a term of the contract' [53]. However, H submitted that a proper application of Arnold v Britton would not support the construction found by the judge. If H's submissions were correct, the only basis upon which the judge could conclude that W had a right of occupation was by his imputation of such a right into the body of the order. It was therefore necessary to consider whether the judge was in error in concluding that, under the terms of the order, W was entitled to remain in the property until sale. H submitted that the judge effectively wrote into the order a provision akin to implication, and applied the benefit of hindsight when imposing his view as to what the parties might have negotiated had they known the sale would take so long. However, King LJ considered that it could be inferred that it was H who was seeking to apply the benefit of hindsight to the interpretation of the order, and that it was H who sought to be relieved of the consequences of the Brexit referendum and the impact it had on the sale of the matrimonial home. The court can only take into account the facts or circumstances known or assumed by the parties at the time the document was executed. What was known to the parties, and reflected in the order, was that: · They were husband and wife. · The agreement had been reached in the context of their divorce. · The matrimonial home was to be put on the market at a price agreed by both of them. · W would take over the running costs of the matrimonial home. · They anticipated that the matrimonial home would sell relatively quickly, and that after its sale, W would receive a substantial lump sum. It was not known that the referendum result would have serious consequences for the housing market, and the court could not take into account the fact that the property in fact remained unsold for two years. Neither could the court take into account the fact that H had made a 'bad bargain' to the extent that he had to provide W with rent free accommodation up to a value of £5,000 per week for two and a half years. Furthermore, H's interpretation of the order would serve to undermine the clear intention of the order to prevent either party varying the lump sum, in that the lump sum payable by H to W would be reduced by £600,000 if H was correct, since W would have no other means to satisfy H's demands for rent of £5,000 per week. In terms of the relevance of H's sole ownership of the property, the judge stated that the removal of W's notices was 'self-evidently' to facilitate the sale of the matrimonial home with vacant possession, and because such notices were no longer required as a result of the terms of the order and the impending decree absolute. In the judgment of King LJ, W's agreement to the removal of the notices 'does not, when considered against the totality of the contract, indicate an acceptance that she no longer had any right to occupy the matrimonial home arising out of the terms of the Order' [65]. Those undertakings were administrative provisions, as W submitted. The judge therefore took properly into account both the fact that the matrimonial home was in the sole name of H, and that W agreed to withdraw the notices. Conclusion This case turned solely on the proper interpretation of the order. The judge applied the law correctly, and was entitled to conclude that the effect of the parties' agreement was that W was entitled to stay in occupation of the matrimonial home until such time as the house was sold. The appeal was therefore dismissed. King LJ added that it may be that, in the future, 'parties will choose to be more specific as to the precise terms under which a party remains in occupation of a matrimonial home pending sale' [68]. Henrietta Boyle, Barrister at 1 Hare Court

Our articles are written by experts in their field and include barristers, solicitors, judges, mediators, academics and professionals from a range of related disciplines. Family Law provides a platform for debate for all the important topics, from divorce and care proceedings to transparency and access to justice. If you would like to contribute please email editor@familylaw.co.uk. Spotlight Children and Same Sex Families Children and Same Sex Families: A Legal Handbook More info View All A day in the life Of... Read on Separating couples: Tackling the tensions of still living together Date:28 JAN 2021 Sarah Havers Associate We are living in strange and challenging times. Covid-19 has drastically changed our role and place within our family, at home and work. We have had to alter our habits and how we use our home and other spaces. Stress, conflict, uncertainty and feeling unsettled may be the consequences of such changes, which can, in turn, be the last straw for a marriage.  The breakdown of a relationship can be one of the most traumatic experiences anyone can go through. The added prospect of having to self-isolate with a former partner during lockdown is likely to be particularly challenging. The lockdown has increased the pressure on couples living together, especially those whose relationship has run its course. It is hard to find a way to release the tension, as traditional couples’ counselling, or simply taking a break from each other, is not an option. Moreover, arguments between parents may harm children, especially when everyone is under the same roof all day, every day. However, there are options available to separating couples who need extra help to avoid escalating tensions. A relationship has broken down: pursue a separation or wait until the lockdown ends? One key piece of advice is to try to communicate well and to stay calm. It will often prove extremely difficult but will benefit everyone in the household. The lockdown might be an opportunity to sit down and calmly explain to your partner why you think your relationship has broken down. Family therapists and relationship counsellors are still able to offer their services remotely and are specifically trained to help facilitate effective communication. Even if your partner will not agree to engage, seeking advice from a therapist or counsellor on an individual basis can be invaluable, particularly in these unprecedented times. Once you have heard your partner’s point of view, you could decide to pursue your separation consensually during the lockdown or wait until the lockdown ends. If you decide to pursue your separation, it is important to note that legal support is available despite the current circumstances. The Family Courts are still operating, and even though social distancing must be complied with, the court system has effectively been moved onto a remote platform. Family lawyers are working remotely and are available to assist clients in whatever way is needed. Mediators are also active, helping couples all over the country via video link to find ways of agreeing to childcare arrangements and corenting plans, as well as other practical issues arising from separation or divorce. As a result, it is possible to start divorce proceedings during lockdown should you wish to do so. A good starting point is to check the UK government’s website on how to get a divorce in England and Wales to familiarise yourself with the steps you will need to take. Article continues below... Jackson's Matrimonial Finance Tenth Edition Jackson's Matrimonial Finance is an authoritative... £289.99 View product Cohabitation This work provides commentary, checklists,... £105.99 View product Family Court Practice, The Order the 2020 edition due out in May £589.99 View product If communication with your partner is not possible or likely to be acrimonious, there is nothing to prevent you from planning your separation discreetly and seeking legal advice and support remotely. If you fear for your safety as a result of expressing your feelings, you can get help by calling the Domestic Abuse Helpline on: 0808 2000 247. Household logistics If you decide to start divorce proceedings during the lockdown, the reality is that you will still need to live with your partner for some time. Finding alternative accommodation is rarely a straightforward process due to various factors, often financial. This can cause tremendous stress and fuel disputes in the home. To avoid or calm such situations, communication, establishing a routine and reaching an agreement on the ground rules will all be crucial. Organising your separation while living in the same household must be as structured and collaborative as possible. You could start by agreeing how you share your home, ie who gets which rooms and at what times, and how you share the household expenses. It is best practice to put everything you decide in writing. Although tensions and arguments are unlikely to disappear, trying your best to be organised and rational can prove useful. You can also use the time to discuss your situation further, although couples with children should protect them as far as possible from any acrimony that exists between their parents. Managing childcare In some cases, the heightened tensions that lockdown can bring may necessitate one parent moving out. Both parents should give careful consideration to the physical, emotional and financial practicalities of taking this step in the current climate before deciding to do this. Spending quality time with your children and taking time to explain to them in an appropriate, kind and unbiased way the reasons why you have both reached such a decision are key steps to minimising the impact on your children. It is preferable if this discussion is had with both parents and the children together, and that the children are reassured that they are not to blame for the break-up. The objective is for your children to understand the situation, adhere to the new arrangements and be aware of the steps your family will be taking and how they will be affected. It may be helpful to receive impartial advice on how to minimise the impact of separation on your children, and mediators are available to assist parents to reach co-parenting agreements during the lockdown and also following a separation. Conclusion Going through a separation is a traumatic experience for everyone involved, and the current situation inevitably only heightens and adds to the emotional impact. It is important to seek support if you need help, whether through legal representation, counselling, mediation or just a person you trust and in whom you can confide. Communication with your ex-partner and with those who are able to support you, even if that communication has to be by telephone, video link or messaging, could make all the difference in managing conflict in the event of the breakdown of a marriage or a long-term relationship during the lockdown. This article was first published at www.stewartslaw.com and is reproduced with permission. Categories: Articles Related Articles Authors: Jane Robey 13 AUG 2020 Authors: Michael Rowlands 28 AUG 2020 31 AUG 2020 31 AUG 2020 8 SEP 2020

Judges at the Court of Appeal said banker Kerim Derhalli, 58, had no right to a single penny in rent of the couple's home in Kensington, West London from his ex-wife Jayne Richardson Derhalli, 57.

The cohabitation agreement may need to be re-evaluated if circumstances change in the relationship - for example, if you later have children, move house or experience a substantial change to your financial situation. An agreement that hasn’t been updated to account for major life changes may be found in court to no longer be relevant or enforceable. However, in some circumstances, anticipated events can be written into the agreement ahead of time to ensure its continued relevance in the future. What are the benefits of having a cohabitation agreement? As many as two-thirds of cohabiting couples in the UK may believe they are living in a ‘common law marriage’ (source: BBC News). Unfortunately, there is no legal basis for this, and unmarried couples who live together have no special rights by default. Therefore, the only way to acquire legal protection against the breakdown of a cohabiting relationship - short of getting married or entering into a civil partnership - is to draw up a cohabitation agreement. The advantages of doing so include: ●      Being able to clarify upfront each partner’s individual entitlement to the home. If one partner moves into a property owned by the other, they will have no automatic right to live there if the relationship ends - even if they have made contributions to the mortgage. Similarly, a house that is co-owned by the couple will be divided 50-50 in the event of a breakup, even if one partner made the majority of the payments on it. By contrast, a cohabitation agreement allows the couple to legally establish who really owns what and if each partner should have rights they might not get automatically. ●      Provisions for the future. If one partner has been financially dependent on the other for years or has children, they will have no right to maintenance payments for themselves after a breakup. Unlike divorce or the dissolution of a civil partnership, cohabitation doesn’t automatically carry any obligation for ongoing support for either party - unless this was established in a legal agreement. There would still be an obligation to provide financial support for any children. ●      Reduced stress in the event of a breakup. The end of a relationship can be a very traumatic and emotional time - the last thing anybody wants is a legal dispute, the situation of being asked to move out of their home, or the feeling of having been financially mistreated. Agreeing your rights and ownerships ahead of time can make life much easier for everybody in the long run. How do you get a cohabitation agreement? To draw up a cohabitation agreement, you will need to first have an open and honest conversation with your partner to decide on the exact terms. Once you have agreed between you how your assets are owned and shared (and what should happen to them in the event of a breakup), you should then work with a solicitor to have these decisions drawn up into a formal agreement. The cost involved in this process and the time it takes can be variable depending on the complexity of the agreement. Both partners should seek independent legal advice about whether the agreement is fair and protects their interests, and it should be signed in the presence of witnesses. What happens to a cohabitation agreement if you get married? Unless otherwise specified, a cohabitation agreement will continue to be in effect during and after marriage. However, whether or not it will still be ultimately found by a court to be relevant and enforceable in the event of a divorce is difficult to predict. It’s important to note that a cohabitation agreement can’t supersede or negate other legal rights - so a legal right introduced by marriage won’t usually be contradicted by such a document. Therefore, some couples may write it into their agreement that the contract will come to an end in the event of marriage (and might replace it with a prenuptial agreement instead). At the end of the day, a cohabitation agreement is a sensible document for many couples to own. It doesn’t have to seem unromantic - it’s a simple provision for the future, and it allows both partners to clearly understand their rights and what they own. By drawing up an agreement, both partners in the relationship can give themselves many of the same legal rights as those enjoyed by couples in marriages and civil partnerships - and ensure stability in the coming years, no matter what. This post was contributed by Girlings Solicitors.

The judge had allowed the husband's appeal from a maintenance pending suit order, principally on the basis that the the deputy district judge had "failed to apply the law appropriately" and had not undertaken any "critical analysis of the wife's needs". The wife now appealed against that decision. In Moylan LJ's view, the deputy district judge had undertaken a sufficient analysis of the relevant factors to support her decision, including the wife's listed needs and likely income, and the husband's budget. She had been entitled to include the amount sought for school fees, and had reached a fair decision as to what level of maintenance would be reasonable. In those circumstances, there was no basis on which the judge could properly interfere with the decision. Asplin and Macur LJJ agreed. The appeal would be allowed, with the judge's order being set aside, including the costs order. The maintenance pending suit order made by the deputy district judge would be restored, save for a paragraph dealing with the mortgage. Judgment, published: 22/01/2021 Topics Share