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GAZETTE
APRIL 1985
Financial Aspects
The question of who gets what is the aspect of divorce
which tends to take up most of the lawyer's time. Essen-
tially, it divides into:
(i) the division of the matrimonial capital, and
(ii) maintenance for (a) the spouse, and, (b) the
children.
(i) Capital
In very many cases the only capital will be the
matrimonial home. The Court will be anxious to
ensure that if there are any children involved they
will be adequately housed until their majority;
subject to that priority, the aim is to ensure that
both parties have a roof over their heads.
In deciding on the division of capital, the Court will
look at all the circumstances of the marriage, and
will take into account anything relevant, including
the length of the marriage, the age of the parties, the
parties' resources, the parties' needs, the parties'
earning capacities, what property each party
brought to the marriage and what each has
contributed to the marriage. There is a wide judicial
discretion and each case turns on its own facts, so
that, as Lord Justice Ormrod said in the case of
Martin
-v-
Martin
[1977] 3 WLR 101, "It is the
essence of such a discretionary situation that the
Court should preserve, so far as it can, the utmost
elasticity to deal with each case on its own facts.
Therefore, it is a matter of trial and error and
imagination on the part of those advising clients.
Equally, it means that decisions of this Court can
never be better than guidelines. They are not
precedents in the strict sense of the word." But the
experienced practitioner does have an insight as to
how the judicial discretion is likely to be exercised.
When the Court is making an Order in respect of
capital, it is in effect either ordering one spouse to
transfer his property interests to the other (and such
Order is known as a Property Adjustment Order),
or ordering a lump sum payment.
(ii) (a) Maintenance for the Spouse
Here again, the wide judicial discretion as described
by Lord Justice Ormrod applies, and the Court in
particular takes into account much the same criteria
as above and which are listed in Section 25 of the
Matrimonial Causes Act 1973, which has been
amended by Section 3 of the Matrimonial and
Family Proceedings Act 1984. They include the
income earning capacity, property and other
financial resources which each of the parties to the
marriage has or is likely to have, the financial needs
and obligations and responsibilities, standard of
living enjoyed by the family before the breakdown
of the marriage, the age of each party to the
marriage and its duration, health, contribution and
'conduct' where it would be equitable, in the
opinion of the Court, to disregard it.
The two new priorities, however, given the 1984
Family Proceedings Act are that the Court should
have, firstly, consideration to the welfare of the
children and, secondly, that the Court should have
more than an eye to the possibility of the wife
working. A young wife with a business degree and
with work experience will be in a different position
to a young wife with no qualifications or experience
and three young children. Similarly, an older
woman who has not worked through the twenty-
five years of her married life has a much lower
potential earning capacity than a woman of the
same age who has gone out to work throughout her
married life. One guideline, but it is only a guideline,
is that the wife's income should be brought up to
one-third of the joint incomes. If the Court feels
that, having considered all the circumstances,
maintenance should be awarded to a spouse, the
Order will be made by way of periodical payments.
(ii) (b) Maintenance for the Children
Either parent can be ordered to pay maintenance to
the children of the marriage. Such Orders will again
be made having regard to all the circumstances,
especially the needs of the children. The Order will
normally be for maintenance to be paid to the
children until their majority or until they have
finished full-time education. Children are not
entitled, in England, to capital provision in the same
way as a wife, even under the said 1984 Act, save
and except small lump sum payments which are
really in lieu of maintenance.
The Court has power to order maintenance pending
suit. This is available to meet the immediate financial
needs of a spouse and/or children during the period from
the issue of the petition to the final Orders in respect of
maintenance.
The details of each party's finances and the capital and
income attributable to each or both spouses are brought
to the Court's attention by way of affidavits of means and
discovery. It is open to each party to challenge the
affidavit of the other by means of further affidavits
and / or questionnaires. The assistance of such persons as
accountants, stockbrokers, valuers and so forth can often
be required.
Once a divorce is finalised the obligations imposed by
marriage cease and, accordingly, when considering
finance it is necessary to consider the wider effect of the
end of the legal relationship, e.g. the loss of pension rights
to a woman as a result of her ceasing to be the wife of the
man.
When maintenance is being paid by way of periodical
payments, on the death of the paying party the periodical
payments will cease and it may, therefore, be necessary,
especially if the paying spouse is much older than the
other, to make arrangements to insure the paying
spouse's title to compensate for loss of pension rights or
to secure maintenance on capital.
Over the last few years, a principle has emerged which is
known as the "clean break" principle. Put at its simplest,
this means that where possible the divorce should be
arranged as fairly as possible, giving both parties a fair
division of the matrimonial property, but also in order to
set each on their own feet and enable them to lead
individual lives without interfering with the other. It is,
perhaps, for this reason that the Periodical Payments
Order is now less popular, unless there are good reasons,
such as the existence of children, which require
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