Tuesday 4 December 2012

One too many days of Christmas?

So the festive season is nearly here, there are Christmas displays in shop windows and the build-up has well and truly begun.

Whilst this for many is a happy time of year the added stress and debt can put strain on relationships and cracks may start to appear or become more apparent for those who are not used to spending long periods with their partner or children.
The constant planning and pressure for everything to be perfect can leave couples at breaking point and it is a sad fact that reports of Domestic Violence and people seeking advice for relationship breakdown often double in the post-Christmas period.
With the recession still in force, this year may seem particularly difficult for many but nobody wants to suffer upset at Christmas so how can you try to Christmas proof your relationship?
1. Keep a check on your alcohol consumption – excessive alcohol can frequently lead to people being more aggressive/argumentative or expressing views that they may later regret – alcohol and the pressure of a family Christmas can be a disaster
2. Agree a budget for each family member or for the children and stick to it – financial pressures are one of the biggest strains at Christmas and can be source of many arguments, even in to the New Year when debts need to be paid off
3. If you’re struggling, refusing to speak to one another, whether that is because you simply can’t bear it or because you fear it will cause a row, will see tensions build – try and clear the air about issues as quickly as possible and away from family members.
4. Perspective – with the added stress and pressure the smallest of things can become a source of major irritation. Stand back and count to 10, is it that big an issue? If it is then speak about it, if not, let it go.
It is rare that Christmas is the cause for a relationship breaking down but it can magnify cracks in a relationship and be the last straw – if that is the case, seek out specialist advice in the New Year and remember that friends may be well meaning but they are frequently wrong or influenced by their own experiences.
For those couples already separated, particularly with children, the issue of how to deal with Christmas can raise other difficulties, here are a few tips to help…
1. If you have recently separated, or even if you have been for some time, rely on your friends and family for support. Surrounding yourself with close friends will lift your mood and stop you dwelling on matters.
2. Make Christmas your own – often when there are children involved, a family will have certain traditions done each year. Don’t focus on what has always been done, make your own traditions and memories and move forward
3. Forget the emotion – maybe you are still processing emotions from the breakdown of your marriage/relationship try not to let your children sense that over Christmas. Remember this, as long as children see both of their parents over the Christmas period they won’t be too concerned about who they see on Christmas Day – Christmas starts when the presents start and ends when the presents end – who said Santa can’t leave their presents in 2 houses?
4. Communication is key – when you separate there will be all sorts of emotions to process and you will both be feeling them, not necessarily the same ones at the same time. Communicating with your ex about Christmas presents, arrangements etc. will enable you and the children to have an enjoyable break.

Friday 30 November 2012

Applying the brakes

Following my last post, we saw a fast car and an open road for unscrupulous spouses who may wish to put assets beyond the reach of the family courts on divorce.
There is action that can be taken by the money-makers to make the most of any company structure but equally some things that the spouse chasing settlement might focus on for best effect – I use the example of wife in this post as chasing settlement, although it could just as easily be the husband.
So…how do we apply the brakes?
1. Look at the family home first…
Even where the Family Home is owned in the name of the company it is often possible to argue that, as the company has allowed the family to reside in the property, it has created a “settlement”.
2. Check the husband’s directors’ loan account
It is possible for the family court to order transfer of the loan account to the wife, who will then be able to enforce payment of the account against the company to extract the monies.
3. Look at Transfer of Shares…
Entirely possible for the family courts to make such an order but be careful…some company articles of association mean that the board has the discretion not to recognise any transfer of shares, which will render any such transfer pointless
4. Check the source of funds….
Check where money for the purchase of company assets came from. If it came from the husband then it may be possible to argue that those assets purchased in the company’s name but with the husband’s money are held on trust for him, therefore opening up the possibility of them being transferred to the wife
5. Prevention is better than a cure…
Ensure that any pre-nuptial agreement considers these issues. 
6. If all else fails...
Be very careful about the drafting of any family court order. Consider drafting a lump sum order in instalments, which will allow the possibility of applying to the court to commit the husband to prison for breach of each instalment, as opposed to one payment – which will allow only one committal application
There may be one large brake applied as I understand that permission has been given to Mrs Prest to appeal to the Supreme Court against the order of the Court of Appeal. We shall await with interest the outcome of that.

Thursday 22 November 2012

All we need is a fast car and the open road…

And that is exactly what “money-makers” got according to LJ Thorpe in the recent Chancery judgement in Petrodel Resources Ltd & Ors v Prest & Ors.

The facts of the case are summarised as follows:
The parties married in 1993 and had 4 children, all teenagers by the time of the hearing.
The Husband founded several companies, collectively called the Petrodel Group and the parties lived a lavish lifestyle. There were properties owned in London, Nigeria and the Caribbean and the parties agreed outgoings of about £700-£800k per year.
The Former Matrimonial Home in London (with a value of about £4m) and the properties elsewhere were all held in the names of various companies forming the Petrodel Group and in essence this caused the central issue in the case.
The family court heard evidence from the parties and was tasked with trying to establish the extent of the husband’s wealth. This was easier said than done as the husband had failed to frankly disclose his assets and had throughout the proceedings been less than honest and open. He had breached orders for maintenance that he was to pay to his wife and his brother even issued injunctive proceedings in Nigeria to prevent the release of papers or information relating to one of the companies (although the husband did, when it suited him, disclose certain papers).
The Court ultimately determined that a fair settlement to the wife would be a sum of £17.5m. It was decided that although the former matrimonial home was owned in the name of one of the companies, it was held on trust and, therefore, could be transferred to the wife without difficulty.
The bigger issue for the Court was to consider what orders it could make against the other property or shares held in the names of the various companies.
This was important because under the relevant legislation only property to which a party is “entitled” can be ordered to be transferred to the other. This means that the party must be legally or beneficially entitled to the property or it cannot be transferred.
So, a party who owns shares can be ordered to transfer them, a party found to have a beneficial interest in a property legally owned by someone else, perhaps because he has paid all of the outgoings/expenses, can have the property transferred to his spouse.
In this case, the companies were the legal owners of the property but did this mean that the husband was not “entitled” to it?
The husband was the majority shareholder in the companies and the Court found that the husband had controlled the companies and assets for the benefit of the family and had been able to use the companies to pay his own personal and legal expenses.
The Court was in no doubt that the husband was the effective owner and controller of the companies and that he had unrestricted access to the assets and could dispose of them as he wished, without any need for a board to approve his actions.
The Court did accept that the companies had been established legitimately for tax and wealth protection purposes and that there had been no impropriety on the part of the husband in running the companies.
The Court felt that the property effectively belonged to the husband and that he was “entitled” to it and that, therefore, it could be transferred to the wife.
The companies appealed the decision, as did the husband. The husband was initially granted permission to appeal subject to him paying to the wife the money owed under the maintenance orders that he had breached. He did not do so and so his appeal was struck out – the companies continued with their appeal.
The majority of the appeal court disagreed with the family court decision, except the one family judge sitting on appeal, LJ Thorpe who said that if the decision of the family court was reversed in terms of the company held assets, it would put those beyond the reach of the family court and fairness then could not be achieved.
On majority, the court determined that the husband was not “entitled” to the property and that it was wrong to consider that because he was the majority shareholder he could deal with the property as if it were his own. They said that it was not enough to be satisfied that it was “effectively his” – he had to be entitled to it.
Companies are separate legal entities and assets held in company names belong to that company entity. The normal starting point is that shareholders have no interest in the company’s assets.
It is, of course, possible to go behind the “corporate veil” but only where there has been impropriety i.e. that the company structure has been improperly used to avoid or conceal liability and that it should be disregarded to ensure that no benefit is gained from its improper use.
But the husband’s lack of co-operation in proceedings and his less than honest disclosure to the Courts is not impropriety in terms of the company structure and so the Courts cannot look behind it.
What followed from the appeal court was a look at various case law and a telling off for the family courts for using “family justice” rather as a catch all to get around having to apply strict legal principles of the law in other areas.
The court could not, therefore, order transfer of the properties owned by the companies and whilst of course it remains open to the Court to order the husband to pay a lump sum, such an order would have no teeth, as there was no realistic way of enforcing it against the husband.
This judgement is likely to have a significant impact on the ability of the family courts to achieve fairness in cases where one party is involved in the running of a company or companies which own certain assets.
It is more likely to come into its own in the future, once parties have taken advice and recognise the real opportunities that this case provides for assets being put beyond the reach of the family courts on divorce.
It will mean that creative thinking will be required when settlement terms are made, both in the construction of the deal and the wording of any order. It may also have an impact on the construction of pre-nuptial agreements and may see each respective side seeking certain clauses that before now perhaps would have been less important.
In my next post I’ll deal with some of the brakes that might be applied to this fast car which, at present, has an open road in front of it….

Tuesday 13 November 2012

Bankruptcy and Divorce

In this economic climate, whether we are recovering from recession or not, the issue of bankruptcy on divorce or after the event often raises its head.

The recently reported case of McRoberts saw the Court consider the issue of what to do with a debt arising from an Order in family proceedings when the payer (in this case the husband) had been made bankrupt.
The Order was made by agreement on the parties’ divorce in 2003 and provided for the husband to pay to the wife £450,000 by instalments. The wife received about £211,000 of that but the husband then defaulted and was declared bankrupt in September 2006.
The wife entered a proof of debt in the bankruptcy for £244,966 (which represented the balance owed to her plus interest) but there was no money available to the creditors of the husband and the wife, therefore, was not paid anything.
The husband was discharged from his bankruptcy in September 2007 and then in 2012 the husband applied to the Court for him to be released from the debt still owed to his wife.
It is fair to say that quite a bit rested on the judgement of this case as, had the husband succeeded, it may well have opened the gates for others to try and avoid paying money due under family Court orders to their ex-spouses by way of bankruptcy.
The default position, which was accepted by both parties, is that orders made in family proceedings or under a maintenance calculation made under the Child Support Act 1991 are not discharged by bankruptcy. There is however discretion for the Court to provide release from such debts.
This discretion has been the subject of only limited case law but it is clear that is a discretion that is unlimited.
So….how will the Court decide when to use its discretion and release applicants from such debts.
Answer....The Court will try to balance any prejudice to the Respondent in having the debt released if there might be a chance of some or all of it being met and any prejudice to the Applicant in building a new life and financial future for himself and his dependents if the debt were to remain.
It is the Applicant that has the burden of proof – i.e. it is the Applicant who must satisfy the Court that there will be prejudice to him and that, as such, the debt should be released.
Mr McRoberts -
1.   suggested that the initial order of the family courts was in fact an obligation to pay maintenance to the wife (worded as an order for a lump sum in instalments) and that it should be viewed by the Court as a maintenance obligation or at the very least a lump sum payable by instalments, both of which can be varied under matrimonial legislation.
2.   argued that the variation should and could be done by the Court hearing the current application under their discretionary powers
3.   suggested that as the order was in fact maintenance, disguised as a lump sum by instalments, the arrears of maintenance over 12 months old could not be enforced by the wife without the Court’s express permission
4.   suggested that the length of time that had passed with the wife not seeking to enforce the order against the husband leant towards the debt being released
5.   and finally….. suggested that if the debt was released at this stage, it would not prejudice the wife because in the event that the husband had significant capital or income in the future, the wife could apply in the family courts for financial provision because the “Clean Break” (you’ll remember that from an earlier post!) that the order had provided for had no effect until the terms of the initial order had been met and they had not.
Mrs McRoberts -
1.   pointed out that the Matrimonial Causes Act (under which many family financial matters are determined) provided specifically for lump sum orders by instalment independent of any suggestion that those types of orders are “maintenance orders”
2.   pointed to the order itself, which said that the entire lump sum was to become payable on default of any instalment. As the husband had defaulted in payments, the debt was clearly now  all due as a lump sum and, as such, could not be varied under matrimonial legislation
3.   and finally…. pointed out that ,in the event that the debt was released, whilst the wife could apply in the future for financial provision such an application would only be judged on her needs at the time and would not reflect her interest in the previous marital property - which of course the award of £450,000 in the initial order did.
The court felt that the initial order was for a lump sum and that, as such, the order could not be varied.
In any event, the Court was clear that what the Insolvency Act did not allow the Court to do in these circumstances was to review the merits or fairness of the initial order or debt. That was so even where the circumstances of the case or parties have changed so that a review of the initial order might be appropriate.
In the McRoberts case this was relevant as the wife had been successful following the divorce and was at the time of judgement in a more secure financial position than the husband.
The husband did not set out the details of any future enterprise or business that would be affected if the debt remained and no special reason why the debt remaining would prevent him moving forward.
Lessons –
Be aware that a change in circumstances leading to bankruptcy will not clear debts or obligations under previous family court orders.
Be aware that even where the debt remaining seems “unfair” in the circumstances, the Court will not use Insolvency legislation to vary or review the debt.

Friday 2 November 2012

Inheritance & Divorce

Divorce and the financial negotiations that ensue are already difficult creatures for clients to have to face in the aftermath of a separation but add to that inherited assets or wealth and you have a more complicated situation.

Leaving aside the added emotion that comes from the feeling that money or property handed down from parents or family members is at risk of going to your ex-spouse, how those inherited assets are dealt with by the Court will also be up for discussion.
What is clear from case law is that inherited assets or wealth are “non-matrimonial” by their nature. That distinguishes them from “marital assets”, which are those accrued during the marriage by the effort of one or both parties jointly and commonly include the former marital home, savings, pensions, investments etc. etc.
There may be arguments of course that some assets though accrued within the marriage were built as a result of a special or stellar contribution from one party alone – that I leave for another day!
The importance of distinguishing inherited assets as “non-matrimonial” is that this class of assets is not subject to the normal “sharing principle” that marital assets are i.e. there is no entitlement by one spouse to an equal share of the other’s non-matrimonial assets.
Sounds great! Surely that means my inheritance is safe!
If all in family law were that clear cut the Court wouldn’t have the wide discretion that it does and litigants in person would be in a much better position.
The fact is that whilst the Court has been clear that inherited, non-matrimonial property is not subject to the normal “sharing principle” it will not be discounted entirely.
Firstly, we must look at whether there has been any “mingling” with marital assets i.e. part of an inheritance used to pay off the mortgage on the marital home or purchase the marital home outright. Any money mingled with a marital asset (which the marital home is, however it was purchased) has the effect of diluting the “non-matrimonial argument” and the payer may have to accept that those monies have been taken into the “pot” for sharing (in which case he/she may have to rely on arguing that their greater financial contribution should give them more of a % settlement).
If inherited monies have been kept separate and apart and identifiable i.e. in separate savings/investment accounts then the Court may also look at the timing of the inheritance and whether the family has been used to drawing any income from the assets, in the case of investments or shares.
Ultimately, the Court will come back to look at the needs of the parties. Even if you have been successful in establishing that assets are inherited and therefore non-matrimonial the Court will invade those assets if that is the only way in which the needs of the other party can be met.
This was very recently evidenced in the case of YvY, in which the husband had a landed estate worth about £26m. The marriage was 26 years long. The wife was awarded 32.5% of the assets which the Court felt fairly met her needs. The Court made comment about sharing and felt that, taking into account the origin of the wealth, the award that they had settled on met not only her needs but also was fair in terms of any entitlement to share.
In the end, the needs of the parties tends to trump all other arguments and this recent case shows that, even in big money cases, needs arguments can be key to settlement.
To give clients the best possible chance (absent any post-nup or pre-nup agreements) the advice must be to keep any inheritance separate and apart and try not to have recourse to it to fund family life – not sure how feasible that is within the context of a marriage! – and accept that, whatever steps are taken, if it is necessary to fairly satisfy the needs of the other spouse on divorce it will be used.
I do wish for my clients that I could say “yes, you’ll be able to keep all of that” or “no, that will have to be shared” and the proposal that marital finances on separation should be resolved by applying a formula sounds appealing to those who crave certainty.
..…the difficulty is, and probably always will be, how to legislate to provide certainty whilst ensuring a fair outcome for all, given the diversity of circumstances surrounding family structures and wealth and the vast differences that there can be in arguments about “needs”.
Ultimately, the Court retains its discretion as regards inherited wealth and assets and the way in which it takes such assets into account in any particular case so there can be no absolute certainty.

Thursday 25 October 2012

Child Maintenance - Changes ahead.

This month saw a new child maintenance formula introduced for the CSA to calculate child maintenance. There has been little detail published about the new scheme so I thought I’d do a bit on this.

Initially, the scheme will apply to all new cases where there are 4 or more children and will be opened up gradually, with all cases falling under the new formula from early 2014.
The new formula uses gross income instead of net income, which has been used for some time to form the basis of the calculations by the CSA.
It is hoped that in using gross income figures this will avoid delays and make it easier to establish self-employed income, by using tax returns and information submitted to HM Revenue & Customs instead of relying on documentation and information from the parent themselves. It should also help to make it more difficult for parents to minimise the income assessed in order to reduce their child maintenance liability.
The new formula is to be applied in 2 parts, one for the first £800 of gross weekly income (12% for one child, 16% for 2 children and 19% for three or more) and the second for any gross weekly income over £800 (9% for one child, 12% for two children and 15% for three or more). There is a cap of £3,000 per week gross income, beyond which parents shall have to apply to the Court.
There will continue to be reductions in maintenance if the paying parent is financially responsible for other children, is a step parent to other children in his/her household or to take account of overnight stays.
Controversially, there will be a charge for using the CSA to assess and collect child maintenance, whereas at the moment this is free. The charge is likely to come in once the new formula is being applied to all cases.
Consultations on the level of that charge shall end shortly but some critics say that charges may not be affordable for all parents and will see money effectively taken from the children it was meant to support.
Existing cases will not be affected until late 2013 but when they are it will mean that all currently paying parents will be given an opportunity to establish a direct payment to the other parent (even those parents who are paying through the CSA at the moment because of their history of non-payment). The CSA has a direct payment scheme, which would mean that the paying parent can make their payments direct but without the receiving parent having to disclose bank details etc.
Failing any agreement or direct payment, a fresh application will have to be made to the CSA by the parent with care of the children.
Critics of this part of the scheme have suggested that this may allow perpetrators of domestic violence to manipulate or financially control their ex-partners by making direct payments but changing the dates or missing payments, the only other option for the victim to be to apply to the CSA once again and be charged.
The move to use gross income figures is likely to help with accurate assessment and enforcement of child maintenance but the proposed charges may, for many, be an obstacle to obtaining a secure financial future for their children, which ironically is exactly what the child maintenance scheme is supposed to achieve.
As with many of these things, the devil is in the detail so I think we’ll have to wait and see how it all works in practice.

Monday 15 October 2012

A stable future?

It has been recently reported that by 2047 families headed by married couples will be in the minority, at just 49.5%, if the current rate of decline in marriages continues. The think tank calls for additional government focus and support to ensure family stability, the breakdown of which costs society an estimated £44billon per year.

The proportion of families headed by a married couple has declined by 5% in the last 10 years and cohabitation has increased by some 3%. I have posted earlier about the marriage foundation, which extols marriage as the gold standard. There certainly are studies to support that cohabiting relationships are less stable than married ones.
And yet, I wonder how much impact any government schemes or proposals would really have in turning the tables and encouraging people to marry. There is talk of need for a Government department for families to tackle family breakdown and introduction of a transferable tax allowance for married couples to promote marriage.
Financial incentives to marriage are not, in my opinion, likely to make a difference. I cannot think that the vast majority of people marry for tax or any other financial benefit that they might receive from the state and if they do, how stable is their relationship likely to be in the future?  Are those people then to be discouraged from separation even in the most distressing of circumstances because to do so would be financially disadvantageous? Is that how we see our future?
The CSJ comments that more must be done to strengthen families in the poorest communities to ensure social recovery and economic growth – will financial incentives such as transferable tax allowances make marriage more appealing in these communities? How does this sit with cuts to state funded benefits impacting on many families up and down the country and increasing the pressure on them?
If stability of marriage, or any other relationship, is the goal then I do think there needs to be more done on a deeper level – to encourage people to work through problems or communicate more effectively – how or if the government is placed to do that is questionable.
The real difficulty may be that society as a whole has changed and that future generations view their lives very differently. Relationships now take on many forms and I wonder whether younger generations will hold marriage to be the “gold standard” whatever incentives or support there is?
The fact is that, unless and until sufficient is done and public opinion is swayed, cohabitation will continue to increase, leaving many people in precarious positions on separation and without any real understanding of their legal rights.
Following the logic of the CSJ, perhaps education on cohabitation and its various potential legal/financial pitfalls might persuade more into marriage instead?!

Tuesday 9 October 2012

Real life drama – Part 2

Following on from my last post here’s the next storyline….

 1. The non-biological mother and Residence
Ashley is Gaby’s biological father, her mother not being around (although if she were matters might be different again). Ashley and Laurel (his wife and Gaby’s step-mother) have separated and Gabby and her half-brother (Ashley and Laurel’s son) Arthur have remained living with Laurel and have had Contact with their father until recently.
Gaby expressed a wish to stay with her father and, although he does not have appropriate housing at the moment and has suffered anger management issues, which manifested themselves in him physically attacking his own father and controlling his money, he has taken Gaby to live with him.
Much as with Paddy’s situation, the fact that Laurel married Gaby’s father does not provide her automatically with PR for Gaby – I must confess that I cannot remember far back enough to know whether there was some PR agreement made between Ashley and Laurel so I assume that there is not. Ordinarily that would mean that Gaby’s school might be in difficulty providing information about Gaby to Laurel without Ashley’s agreement. In addition, it means that technically Ashley is able to decide the big issues in Gaby’s life without consulting Laurel, including where she resides. Ashley should be consulting with Gaby’s biological mother.
Ashley is perfectly able to remove Gaby from Laurel’s care but of course he must consider Gaby’s best interests. If Laurel wished to prevent Gaby’s removal from her care or seek her return then she would need to make an application to the Court for a Residence Order in her favour – as she is Gaby’s step-parent.
In determining Gaby’s Residence, the Court would need to have regard to the “welfare checklist” under the Children Act 1989, which includes the child’s wishes and feelings (considered in the light of their age and understanding), the child’s physical and emotional needs, the likely effect of any change of circumstances, how capable each party is of meeting the child’s needs and any harm or risk of harm to the child.
Gaby, as I understand it, is about 10 years old and is clearly capable of expressing a view. Her wishes will not be the overriding factor, given her age, and although she is aware of the difficulties that her father has had as regards his anger she is probably not old enough to understand any on-going risk to her – if indeed there is any, on the basis that he has been having unsupervised Contact with the children.
The Court would have to assess any anger management issues that Ashley continues to have and any risk that he might pose. In addition, they would have to weigh into the balance Arthur’s best interests and whether it would be appropriate to split the siblings or whether this is likely to cause them more harm. If it is decided that to split the siblings is not appropriate, and it is unusual, then the Court will need to balance the needs of both children in coming to a solution.
The fact that Ashley is Gaby’s biological parent is a factor that the Court will have to consider but it is not determinative. It is certainly a contributor to the Court’s balancing exercise, as will be the length of time that Gaby has been with her father by the time any Court application is made. Laurel has, however, parented Gaby for some significant time and her relationship with Laurel will also need to be considered.
So…..we’ll see what action Laurel decides to take - will the children continue to grow up in separate households, will Arthur move also to reside with his father or will Gaby have to return to Laurel’s care…you never know, although far less appealing as a soap storyline than a Courtroom battle, the show might favour an amicable resolution in the children’s best interests as the real world does!

Wednesday 3 October 2012

Real life drama – Part 1

Ok, so I admit it – I do watch soaps at home – Emmerdale and Coronation St are my guilty secrets – I still struggle to believe that so much drama can happen in one small village/street…
Anyway, for those of you not aware, recently Emmerdale has seen its fair share of family breakups – children caught in all of them – and Coronation St. sees an abusive relationship play out, baby in tow.
The current storylines highlight issues that we see frequently when families separate and so I shall go through them and the legal points they raise over a couple of posts…
1. The Step-family and removal from the jurisdiction
Marlon fathered baby Leo with his then partner Rhona – they separated when she was pregnant and she formed a relationship with Paddy, whom she married. All was well and Marlon was seeing Leo (who has Downs Syndrome) regularly. Paddy was offered a job in New Zealand and they all agreed to go with Leo. Marlon changed his mind and wanted baby Leo to stay in the UK – all hell broke loose….
There are several issues that this potentially throws up. Firstly, Marlon and Rhona were not married when Leo was born – unless Rhona named Marlon on Leo’s birth certificate (which from memory she did) he would not have Parental Responsibility for Leo and she would be the only person to have this. This would have meant that there would be nothing legally to prevent her changing his name, removing him from the jurisdiction or taking other important decisions in his life without consulting Marlon.
Paddy’s status in Leo’s life as his step-father is also an issue. Simply marrying Leo’s mother does not of itself provide Paddy with Parental Responsibility for Leo. Marlon (assuming he has PR) and Rhona could have agreed to execute a PR Agreement to provide Paddy with PR for Leo but unless they did that he would have to apply to the Court for an Order to obtain PR.
This doesn’t affect matters day to day because Rhona has PR for Leo and it is unlikely that Paddy would ever have to make any important decision for Leo alone – consider though if Rhona were to die – Paddy would almost certainly need PR were Leo to remain with him.
Marlon commenced Court proceedings for Residence of Leo when he changed his mind about leaving for New Zealand and the Court granted an interim order to prevent any removal called a Prohibited Steps Order. Rhona left the jurisdiction with Leo anyway. Not only has Rhona breached the terms of the interim Order that the Court made, she also has committed an offence under the Child Abduction Act if Marlon has PR and she removes Leo for more than a month.
She also is potentially is liable to be prosecuted for “child abduction”.
To some that seems odd on the basis that Leo is her child but “child abduction” is the wrongful removal or retention of a child. That removal or retention is considered “wrongful” where it breaches the rights of custody of the other person, institution or other body under the law of the country in which the child was habitually resident immediately before the removal/retention.
Where that has happened, the Hague Convention will come into play – assuming that the other country, where the child has been removed to or retained in, is a signatory.
New Zealand is a signatory of the Hague Convention and, as Marlon had Parental Responsibility for Leo (being named on his birth certificate) his rights of custody had been breached. The term “rights of custody” do not necessarily refer to who the child was living with – there has been case law on this point that has established that it is a wider term that can encompasses both rights given by Court Order, PR and where care is being given on a daily basis and for all intents and purposes a person is exercising PR and caring for the child, irrespective of any Court Orders.
The other argument in this case could be that Rhona had in any event breached the Court’s rights of custody – as there were pending proceedings for Residence of Leo in front of the Courts here and in removing the child, she has interfered with the Court’s right to determine Leo’s residence.
Marlon’s correct course of action would be to approach the Central Authority for Child Abduction, who will in turn contact the Central Authority in New Zealand to secure Leo’s immediate return to England….whether he has done so or not is something I am not clear on, having missed a few episodes recently!!
………

Tuesday 2 October 2012

Irreconcilable Differences?

Several clients of mine have recently spoken to me about divorcing on the basis of “irreconcilable differences” and even one of my colleagues mentioned the concept (his area is not family law).

I was forced to explain to all that the only ground for divorce in England and Wales is the irretrievable breakdown of the marriage. I also explained that this ground must be supported by one of several “facts” – behaviour, adultery, 2 years separation with the other’s consent, desertion or 5 years separation.
Whilst going through the explanations and answering the questions that ensued, it stuck me that their misconception about the divorce process and the ground for divorce in this country had almost certainly come from watching US dramas/reading articles about celebrity divorces in the papers – almost all of which mention one party “citing irreconcilable differences”. Fine if you are divorcing in the US.
Of course no-one should or would have reason to know the ins and outs of the divorce process in this country unless they were practising family law or had been through the process before but it did make me wonder where people seek out information when they are faced with separation or divorce – especially given that these clients were adamant that the information was correct and that their planned course of action was the right one.
At such an important and emotionally charged time in their lives, are clients prepared to avoid UK solicitors at all costs and instead rely on pieces of information picked up from friends, TV, the media etc.
I can only say what I said when faced with those clients and my colleague – you wouldn’t have a look around online to obtain bits of information and then have a go at extracting a tooth, plumbing in a bathroom or fixing a car – at the very least you would obtain some expert advice.
It is perhaps our fault as a profession that we have not appeared approachable enough, have not educated sufficiently and have not done enough to change the perception that people have about the costs involved.
That is surely now coming to an end with the entrance of ABS and certainly costs and accessibility are becoming a point of difference between firms.
Fixed fee options, free initial consultations, DIY divorce packs, factsheets etc. are all services we have developed to educate people and enable them to regain control of costs and action at a time when most feel that they are spiralling out of control.
I believe that many in the profession are doing what they can to make access to information and advice easier and less intimidating for clients but, for things to get better, there must be some change of culture… some general consensus that it is better to obtain expert advice before taking action and that Solicitors are not all smoke and mirrors and actually have some expert knowledge and value to give.
Without that change, I fear that people will continue to shy away from seeing a Solicitor and take action on the basis of the piecemeal (often incorrect) information that they pick up or are given by well-meaning friends – lessons might be learnt when things go wrong and legal advice and action is needed to right it but that is far too late and can be more costly in the long run.
So…. don’t struggle alone or worry about what you are or are not doing….contact Solicitors’ firms and I am prepared to bet that the majority will offer free initial consultations or a fixed fee initial appointment….get the correct legal advice before taking action and ask solicitors whether they do fixed fee services….some already do and in the long run I suspect that this will become more common.

Wednesday 26 September 2012

Hide and Seek

There was recently reported in the press a case of a man who won £50,000 playing Deal or no Deal on TV.

The winner spent the money in the space of 4 months, before the television show aired, as he was in the middle of a Divorce and wanted to make sure that his estranged wife “wouldn’t get a penny”.
The estranged wife apparently only found out about the winnings once the show aired but Mr Brown, the winner, had by then purchased a number of household items, a second hand X-type Jaguar car, a holiday in Mexico, an ipad etc.
Once discovered, the wife applied to court and an injunction was imposed to prevent Mr Brown spending any more of his winnings, if any remained.
Mr Brown will no doubt have to detail exactly what he spent the money on and there will, no doubt, now be argument about his financial conduct – although he did apparently use some of the money to pay off debts and paid for an electrician’s course, having been signed off work for “depression”.
Although Mr Brown’s conduct may be taken into account and the items purchased with the money potentially be divided between the parties, the reality is that a large part of the winnings have gone and the items reportedly purchased are unlikely to hold their value and are almost certainly far less useful to Mrs Brown than the capital that would have been available.
It highlights the importance of maintaining an eye on your spouse’s lifestyle and spending after separation and within the course of a Divorce. I am not talking about making a note of each time they do a food shop or the purchase a new toy for the children but if there is unusual and excessive spending (cars, holidays, expensive items etc.) then questions must be asked about how that is all being funded.
It also goes to show the lengths to which people will go in cases of Divorce to “deprive” the other from any share of what they perceive to be theirs.
This all against a backdrop of each spouse having a duty to provide full and frank disclosure of their financial position – that duty being an on-going one within proceedings and designed to help the parties (and the Court) ascertain what is available for distribution and what would be fair.
I imagine that Mr Brown will have achieved an increase in both his and his wife’s legal costs in determining their matter and an awful lot of ill-feeling between them – a sad state of affairs when you consider that the parties have 2 young children and will have to co-parent for some time to come.

Thursday 20 September 2012

When is a marriage not a marriage?

An odd question on the face of it but one of increasing importance in a world where more and more people live “international” lives, crossing jurisdictions for business and pleasure and residing in different countries.

A recent case in the English Courts brought this issue once again into focus. This featured parties who were both Moroccan by descent, the wife born in England and always residing here, the husband born in Morocco and moving to England when he was 7 with dual citizenship.
The parties went through a Moroccan civil ceremony in the Moroccan Consulate in London. There were witnesses and a formal marriage certificate, two wedding parties and a honeymoon. The ceremony was conducted by a notary and the relationship lasted some 7 years, the parties having a son and separating in 2009 – although staying under the same roof.
The wife sought to issue Divorce proceedings in England but the husband, just over a month earlier and without the wife’s knowledge, had petitioned for Divorce in Morocco.
A Divorce was then finalised in Morocco with minimal financial provision for the wife. The wife’s application before the Court in England, therefore, was for financial provision following the foreign divorce.
For the purposes of marriage, the Consulate constituted English soil and the “marriage” therefore took place in England and was governed by English law. It was perfectly open to the husband to petition for Divorce in Morocco and there is legislation that permits parties to issue applications for financial relief in England following overseas divorce. In order to do so, however, there must have been a “marriage” capable of recognition in England and this became the issue for the Court.
The husband argued that her application must fail because a) there was no marriage recognised in England and b) the Moroccan divorce should not be recognised in England (I’m not dealing with (b) in this piece)
The Judge considered the ceremony, which was wholly non-compliant with the Marriage Act, and the length of the parties’ cohabitation. He found that the ceremony did not give rise to a valid marriage and that the fact that the parties had cohabited together for some 7 years was not enough to give rise to a presumption of a valid marriage and he declared it a “non-marriage”.
But…could this nevertheless amount to a “marriage” for the purposes of applying for financial relief (the wife’s application)? The Court held that despite both parties intending the marriage to have legal consequences there needed to be a valid marriage, or at the least a void marriage (i.e. one that is capable of founding a decree of nullity) for such an application to be made.
And so, the wife could make no financial claim against her ex-husband in England and she was stuck with the “very modest” financial provision awarded to her by the Moroccan Courts, the English courts would not interfere with the flat held in the husband’s sole name (net value of £300,000).
The lessons are there to be learnt….marriage ceremonies should comply with the provisions of the marriage act – pay careful attention to the venue and the provisions as regards who undertakes the ceremony – if no valid/void marriage is created then parties may be left in difficulty on separation, particularly when it comes to dealing with financial affairs.

Tuesday 4 September 2012

Parenting on Separation – endless decisions

There was a case reported in the press recently about a 10 year old girl who wanted to be baptised. The child was living equally between her separated parents, her mother remained of Jewish faith and her father had converted to Christianity after the breakdown of his marriage to the child’s mother, having been of Jewish faith before that.

The child’s mother had issued an application to prevent the child’s baptism going ahead and considered that the child should be made to wait until she was 16 years old before making such a decision – the child’s father considered that the child knew her own mind and that she should be allowed to be baptised now, as was her wish.
Ultimately, whilst there was no jurisdiction for the Court to order that the baptism take place, it refused to prevent the baptism happening and the judge felt that the child’s best interests would be served by starting her baptism classes as soon as possible.
It struck me when looking through the judgement of this, admittedly, unusual case that despite any separation, there are an almost incalculable number of decisions that parents will need to make for children as they grow up. The vast majority of these will need to be made jointly, both because joint decisions ultimately must be better for children but also because Parental Responsibility necessitates consultation when significant decisions are made for a child, such as schooling, religious upbringing, medical care etc.
Disputes concerning a child’s religious upbringing are probably less common than say disputes over schooling but such disputes are not uncommon – even the Cruise v Holmes divorce settlement included clauses to limit the child’s involvement in the father’s following of Scientology as his “religion”.
Also sometimes before the Court are disputes over whether a child should be given certain medical treatment, for example where one parent is a Jehovah’s Witness and will not consent to the giving of blood.
It is fairly common for parents to have differing opinions on various topics but the difficulty with separated parents is how those differences are communicated, acknowledged, discussed and dealt with.
Surely better that potential areas of dispute are considered early on by both parents – at least then they can identify where they differ in their opinions and where perhaps they will need some assistance  in the future – court based or otherwise –if those areas become an issue.
The Court devised, some time ago, a way of encouraging separating parents to think about their views and opinions in terms of the child’s upbringing early on – Parenting Plans.
These “plans” take the form of a booklet and include a whole range of different areas relating to the child’s upbringing – some that parents may not even have given thought to or be aware that the other holds particularly strong views on.
The idea was that these plans were given to separating parents at an early stage, either by a Solicitor or perhaps a Mediator to encourage some forethought and discussion – ideally with the outcome that neither parent would need to resort to Court applications.
I am not sure how successful these plans have been or how routinely they are used across the country but I would say that the earlier potential sources of dispute are identified, the more opportunity there is for parents to enter into discussions together to try and resolve matters.
Ok, it won’t be suitable for every family and life is ever-changing – What if the child expresses a strong wish for something contrary to what the parents had agreed together? What if there is a change of circumstances and as a result one or other parent changes their mind about something?
There is, as ever in cases concerning children, no one size fits all solution but early identification and discussion must surely be a positive all round.

Tuesday 28 August 2012

Adultery & Divorce


I was thinking about this issue the other day, after a client had mentioned to me that she had discovered that her husband had been sending less than appropriate messages to another women and that she had plans to arrange for him to be “caught out” by effectively turning up at his hotel room door.
I advised her to stay well clear of any hotel room doors and there was certainly enough other aspects of his behaviour that she could use to formulate a Petition, which was the course she was set on.
In the end she conceded and agreed that however strong and indignant she felt now, that would soon be forgotten when she was faced with the reality.
But it led me to thinking about adultery in the context of Divorce proceedings and whether it’s worth it – not the adultery (which almost never is!) but relying on it to issue proceedings.
Don’t get me wrong, certainly there may well be times when there has been no other “behaviour” to rely upon and adultery may well be the only feasible option or where it might be important to prove adultery – perhaps for some cultural reason or where a pre-nuptial agreement might be affected.
The majority of cases, however, will involve some other behaviour by the Respondent, perhaps a distancing from family life, a lack of affection or physical relationship, a lack of emotional support etc.  The behaviour might well be as a result of the Respondent conducting an extra marital affair (not always!) but all of it can be used to issue a Petition based on behaviour and not adultery.
But why is that better.....well adultery must be proven or admitted in order for a Divorce to progress on that basis. If the Respondent is not likely to co-operate in proceedings and actively admit his/her adultery then proof it will have to be.
The sexual act of adultery is what must be proven – an inappropriately close relationship is not sufficient! That makes it very difficult (and costly) to prove – not least in terms of emotional cost.
So is it necessary to rely on adultery…..sometimes tactically and sometimes morally but my advice would always be to consider another option, especially if your spouse is not likely to co-operate!

Tuesday 21 August 2012

Cancellation of National Family Week

National Family Week was to run from 25th to 31st August 2012 but has had to sadly be cancelled this year as a result of all of the other big events gripping the nation.
We, for the most part, see our families every day but how much time do we actually spend together?
It is widely accepted that spending quality time with children is important and that this aids their development, sense of worth and belonging and allows for a closer relationship to develop with their parents.
In a world where children are faced with so much at such a young age I believe that it has never been more important for families to be close, to spend time together and for children to feel able to approach their parents about any issue, big or small.
For adults to, spending time with a partner or spouse is important. We rush through our days fitting in work, household chores, children’s parties/dance classes/sports etc. but where is the time set aside to enjoy quality time together?
Much has been made recently by the government about the importance of stability in families and the effect that broken family life can have on children and adults alike.
I for one hope that despite National Family Week having been cancelled this year, people will step back and think about how they could spend even just a little more quality time together.

Wednesday 15 August 2012

Divorcing man’s best friend

I recently saw an advert for family law services that made reference to couples being helped to decide “who gets the dog” and I got to thinking is this really what it comes down to?, is it right to suggest that this is a valid enough argument to have before the Court? to spend money on?
Certainly I am only too aware that positions taken on the division of assets on Divorce or separation can become polarised during negotiations and I know from experience that very often the smaller, more legally insignificant items can become real sticking points (I speak of small and inexpensive items as opposed to small items with significant monetary value)
It’s not that I am unsympathetic and certainly I can well understand sentimental items being of real emotional value to clients. Equally, I can understand the bond that clients can have with their family pets – often seen by many as a great source of reliability and comfort and often bought when children leave for university, to replace the silence that frequently descends at that point.
Of course, there may be situations in which there is a significant cost to the upkeep of the animals, typically horses – that can be a real issue in terms of who is to maintain them financially, are they to be kept, did they form part of the family’s lifestyle etc. those are not the situations I speak of here.
The issue I have is whether people should be encouraged to litigate over small items or pets.
Certainly, encouraged or not, cases continue to reach the high court (granted, with other more significant legal arguments) in which claims to family pets are made. The Courts in the UK tend to take a quite literal approach to family pets, looking really at whose “asset” the pet is, who looked after the animal, who purchased it etc.
The “best interests” of the animal and the emotions of the parties do not feature on the Court’s list of considerations.
My personal view, and that which I would advise my clients, is that they must think long and hard over their stance. They will undoubtedly spend significant amounts of money negotiating such matters, increase the hostility and in some cases risk the other party withdrawing from what you had considered agreed points.
I have not reached a point in my life as yet where I have such attachment to items or pets and I do not agree that clients should be encouraged to litigate over such issues but each person must of course make their own decision.
Still, the question remains….how do you balance emotional value against the monetary cost of litigation/negotiation?

Tuesday 7 August 2012

Father's name on Birth Certificate = responsibility?

The issue of whether mothers should be forced to name a child’s father on its birth certificate first became an issue in 2009 when the Welfare Reform Bill was making its way towards the statute book.

Opponents of the concept at that stage voiced their concern that it could lead to abusive fathers retaining control over their partners, especially on the basis of the proposal that fathers have the ability to declare their own parental status if the mother leaves their name off the certificate.
The Welfare Reform Act did, nevertheless, include a provision making it compulsory for mothers to name a child’s father on the birth certificate if he was known to them. The consequences of non-compliance ranged from a fine of £200 to 7 days imprisonment for perjury if a false statement was made.
When this government came into power it decided not to press ahead with enforcing that particular provision of the Act but the topic raised its head again late last year when the government announced that it was looking at this again as a way of ensuring involvement by fathers in their children’s lives and by way of encouraging a sense of responsibility.
The government has talked of exemptions for this provision being mothers who are victims of domestic violence (if a GP or social worker can corroborate any claim that naming the father would put the mother or child at risk), conceptions by way of rape or sperm donation.
The Liberal Democrats appear to oppose the idea but will forcing fathers to sign birth certificates or forcing mothers to name fathers on them really encourage active involvement or foster a sense of responsibility?
Certainly it might well make it easier to deal with issues of child maintenance but the rationale behind the proposals appears to be that signing the certificate or being named as the child’s father will boost the sense of responsibility and mean that more fathers remain involved with their children beyond separation.
David Lammy, MP for Tottenham mentioned on the BBC in June the effect that his father walking out on his family had on him as a child. Mr Lammy said:
"I missed someone help me learn how to shave, someone help me learn how to do up my tie, someone to talk to in those teenage years that can be so difficult.”
"No-one there on Fathers' Day, no-one at the end of the football game that you were playing, all of those things where the absence of the father is felt acutely”
"Of course relationships break down but active fathers make a huge difference to the lives of young people."
In the same piece Adrienne Burgess, joint chief executive of the Fatherhood Institute, said: "Requiring both parents to sign the birth certificate sends out a powerful message that our expectations of mothers and fathers are equal.”
"Meanwhile, 45,000 children every year are losing out because they do not know, and often never will know, who their father is."
I accept that there are undoubtedly cases where mothers are obstructive in allowing fathers Contact with their children or to develop a meaningful relationship with them but I can’t help but wonder about the responsibility of men who biologically father children but then apparently do nothing to discover if the child is theirs and, if it is, to establish a relationship with them – even if that means Court proceedings.
I am sceptical about whether forcing a mother to name a father on a child’s birth certificate is really likely to encourage more fathers to become actively involved with their children or maintain that involvement.
In addition, naming a father on a birth certificate has the effect of giving him Parental Responsibility for the child, entitling him to be consulted in terms of decisions on schooling, religious upbringing, medical treatment etc. and preventing the child’s removal from England & Wales for periods in excess of 4 weeks without his consent.
If a father chooses to disengage then with the child or the child is born from a short relationship, one-night stand, extra marital affair - where the father really has no interest in maintaining his relationship with the child - the fact of his PR may well cause difficulty for the mother down the line.
I agree that children should be aware of their paternity and that it is healthy and vital for their sense of identity and belonging but I am concerned that these proposals really achieve legal identification of a child’s father and focus less on what children really would benefit from, active involvement in their lives by their fathers.

Wednesday 1 August 2012

Shared Parenting – The proposals…

The topic of the government’s proposal to alter current legislation to reinforce the expectation that, where safe, children should have involvement with both parents formed a post of mine in May.

I am a little behind I’m afraid (hazards of life and work!)
Those of you who read my earlier post will know that my view was (and remains) that the Court and family law system as a whole already works from the starting point that children should have the benefit of a good quality relationship with both parents, where safe to do so. I remain of the view that messing around with current legislation is not necessary and, in fact, potentially more confusing for parents.
Nevertheless, there is now in place a consultation as regards options to achieve the government’s desired result – closing 5th September 2012.
The governments preferred option is to “require the Court to work on the presumption that a child’s welfare is likely to be furthered through safe involvement with both parents – unless the evidence shows this not to be safe or in the child’s best interests.”
Other options are:

1.      to require the Courts to have regard to a principle that a child’s welfare is likely to be furthered through involvement with both parents.

2.      providing that the Court’s starting point in making decisions about children’s care is that a child’s welfare is likely to be furthered through involvement with both parents

3.      inserting, as an additional factor that the Court must consider, the further involvement of both parents.
In terms of the government’s preferred option, like I say, I know of no Judge or Solicitor who would presume otherwise and I don’t consider that any such amendment to expressly set out the presumption will alter the way in which the Court deals with these types of issues
…but how will this be construed by parents in the heat of court proceedings or separation – ultimately it is this that matters, it is clients and their views or perceptions that drive matters through Court. It isn’t beyond belief that in their minds the proposed presumption will relate to equal division of responsibility and, as part of that, time.
Already there have been comments made in the media that fuel such a thought process - “father’s to get equal access rights” being just one. However much the government makes it clear that equal time is not their focus, it will not be ministers trying to explain that to parents in Court.
The government’s argument for such amendment to legislation is that it will assist separating parents and will mean less cases reaching Court. There appears to have been little given to the fact that some 90% of separating couples never reach Court and the remaining 10% ordinarily involve multiple issues and problems.
How will introducing some starting point or presumption help those parents?  it is more likely to further entrench them against each other, leading to longer cases, more hostility and argument over what constitutes sufficient “involvement” with the child.
I have seen several cases where parties’ parenting styles have been different (neither worse nor better than the other but different) with one parent seeking at every opportunity to involve themselves when the children are with the other, criticising the other’s approach – where will the line be drawn?
Further, there appears to be little thought given to how the proposed presumption of “co-operative parenting” will be rebutted. How will the Court identify those cases in which the presumption should not apply? What guidelines are there to be?
Fundamentally, I wonder where the government’s evidence for the necessity of such amendments comes from. There is certainly a perception amongst some people that the Family Courts are biased in some way towards one parent but no evidence that that perception is based on fact. Where is the need for amendment?
Are we to legislate now just to remove or deal with people’s perceptions, however inaccurate they may be?
That will be next to impossible in Family law, where the Court’s quite rightly have wide discretion to act with the child’s welfare as their paramount consideration. Almost every case will see someone come away without all that they wanted and a “perception” that the Court has favoured the other – this seems to be despite all that the judges do to make it clear that their focus is the child.
One thing is clear, the government is set on this course irrespective of the views of Family law professionals or the conclusion of the Family Justice Review – we can only hope that, whichever option is chosen, clear information is given to parents to avoid further incorrect perceptions being formed.