Tutorial 5 - family PDF

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Tutorial 5 – Financial Remedy Case Studies

Tutorial overview The tutorial covers the factors in s25(2) Matrimonial Causes Act 1973 that provide guidance to judges in financial remedy proceedings when determining what order(s) to make. Students will undertake an exercise applying these factors in a problem scenario, together with consideration as to the development of case law where judges have exercised their discretion in applying the factors. Learning Outcomes: At the end of this tutorial students will be able to:   

Have an overview of the law relating to the factors contained within s25(2) Matrimonial Causes Act 1973; Apply the s25(2) factors to a problem scenario; Apply the case law that has developed by the Court in applying the s25(2) factors to a problem scenario.

Essential Reading

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Hayes & Williams’, Family Law: ‘Chapter 4: Money and Property Distribution on Marriage Breakdown;

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The House of Lords judgment of White v White [2001] 1 AC 596 http://www.publications.parliament.uk/pa/ld199900/ldjudgmt/jd001026/white1.htm (Available on Brightspace)

BEFORE THE CLASS: Students will complete the Essential Reading and will then arrange to complete the incomplete PowerPoint that can be found in the lecture folder on Brightspace to supplement their reading of the textbook and to check their understanding of the topic. Activity 5.1 To be completed AT THE CLASS: Students will divide into two groups. Each group will consider one of the following questions:1) Applying the s25(2) factors, advise James as to what financial orders it would be appropriate for the court to make in the case and why. Analyse with reference to relevant case law.

2) Applying the s25(2) factors, advise Kelly as to what financial orders it would be appropriate for the court to make in the case and why. Analyse with reference to relevant case law. There will then be whole group feedback and discussion. FORMATIVE ASSESSMENT: Students should note that the issues raised in the case studies are typical of part of the in-class test and this exercise should therefore be treated as a formative assessment opportunity. James (46) and Kelly (44) were married in 2008. There are two children, Leo (15) and Maya (13). James is not the children's natural father. At the time of his marriage to Kelly, she was a widow with two small children. James has formally adopted both children. The couple have now agreed to divorce. Kelly is living in the former matrimonial home with the children. It is worth £240,000 with an outstanding mortgage of £165,000. The mortgage repayments are £600 per month. Kelly has not been in paid employment since Leo was born. She was a secretary but is worried about the idea of having to go back to work as she is now 44 and when she last worked computers and technology have moved on. James is now living with Nicky in a rented flat for which he pays £550 per month. Nicky does not work. James is a director of a small family private limited company. The company is worth about £500,000. James' father owns 51% of the shares in the company and James and his brother have 24.5% each. The shares have never paid a dividend. James' only income is his salary of £35,000 pa, which works out at £2,050 per month net. James does contribute to a company pension scheme but the scheme only has a transfer value of £20,000 at this time. He also drives a vehicle provided by the company. James has been assessed by the Child Maintenance Service to pay £468 per month to Kelly for the benefit of the children.

Section 25 Factors.

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They are In their 40’s, so they have 20 years to work Married for 20 years, so what have they accrued will have come whilst they’ve been married, so will have to do 50/50 He has formally adopted the children, Value - mortgage = equity. Been out of work for 15 years. Minority shareholding in a private company. Cant sell, as the dad is the main owner, and they have small shares. The only income he gets is 35,000 not inc tax. Cant do anything with the 20,000 he has. Has company car. And for the kids he has to pay 400 a month.

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Apply all factors to the case study first, Then once done that, youll realise which is the most appropriate order. What best fits this family is mesher or sale, if it was older couple, then martin order If property was for sale, then buying each share out? Or just selling it.

- (a)the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire; - (b)the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; - (c)the standard of living enjoyed by the family before the breakdown of the marriage; - (d)the age of each party to the marriage and the duration of the marriage; - (e)any physical or mental disability of either of the parties to the marriage; - (f)the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family; - (g)the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it; - (h)in the case of proceedings for divorce or nullity of marriage, the value to each of the parties to the marriage of any benefit F7 . . . which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.

- Have to be order for sale - Or Mesher order.

- For the company share, he should keep them. However, she is entitled to a proportion for them. Husband should keep the share

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of the company. And the asset he can give her is the equity of the house. House for sale: the only downside to this is their children, but otherwise yeah the house should be for sale. S25(1) court looks at all of the circumstances of the whole house. Some judges would say its going to be a mesher order and he will have to live with that. Some will say he cant live like that. The wife will have to work. There will have to be a fixed term period where he will have to maintain her.

Wife’s perspective: - Order the wife would want: Copy figures out, so A – H. a) Compare those incomes and what that means, it means the wife has no money. So the wife will need an income order b) Earning capacity: doesn’t say the husbands income is going to change The wife: at the moment its 0, so hers is going to have to change. She needs to get herself a job c) The wife’s standard of living was quite good: her current standard can be maintained. Therefore for it to be equally carried. The wife needs to start working d) They are In their 40’s, so they have 20 years to work and put into their pot for their pension. And the fact that they were married for 20 years, means their assets can be divided equally, as when they were married they probably worked and put money for their pension together e) The wife has to look after the children, there’s one 13 and 15, so they are young, will have to make sure she works and looks after the children....