Financial relief: a survey of ten cases over the past 50 years…

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Discretion and the finance judge

 

Matrimonial Causes Act 1973 s 25 imposes a duty to exercise judicial discretion. Substantive law plays only a small part. Despite what many family law barristers, and a few judges, tell you there are no precedents in relation to s 25 distribution in the strict sense of the term: an exercise of discretion is not law. One of the architects of the financial relief scheme in the early days of the 1973 Act was Ormrod LJ who explained this point as follows in Martin (BH) v Martin (D) [1978] Fam 12, [1977] 3 WLR 101, (1977) FLR Rep 444 at 450, CA:

 

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. It equally means that decisions of this court can never be better than guidelines. They are not precedents in the strict sense of the word. There is bound to be an element of uncertainty in the use of the wide discretionary powers given to the court under the 1973 Act, and no doubt there always will be, because as social circumstances change so the court will have to adapt the ways in which it exercises discretion. If property suddenly became available all over the country many of the rationes decidendi of the past would be quite inappropriate.

 

That said, there are cases which provide important guidelines (White (below) is an obvious example). In what follows most turn on points of law; few on discretion. Law must be followed, until overridden by a higher court. By contrast, guidelines are just that – though the higher you go the more persuasive they are.

 

By definition if an appeal is to be allowed on a point of law, it will be changed only by a higher court, where it is said to be wrong (see eg Sharland below). Cases which decide matters in the discretion of the judge should only rarely be set aside on appeal (see Piglowska (below).

 

Top ten financial relief cases

 

My top ten financial relief cases since 1971 (when the present law came in) include:

 

Edgar v Edgar [1980] 1 WLR 1410, (1981) FLR 19, CA – This case is a matter of law: the court must decide whether or not there was a pre-proceedings (ie a separation) agreement; and if so whether it is fair that the court follows it (as confirmed by the Supreme Court for pre-nuptial agreements in Radmacher (formerly Granatino) v Granatino [2010] UKSC 42, [2011] AC 534, [2010] 2 FLR 1900).

 

Minton v Minton [1979] AC 593, [1979] 2 WLR 31, (1978) FLR Rep 461 – A court must seek a clean break; and now in Matrimonial and Family Proceedings Act 1984 by amendment at MCA 1973 s 25A (which made working towards a clean break statutory) but the Lords’ reasoning for this is valuable (and see Ringo Star’s case: S v S [1986] Fam 189, [1987] 1 FLR 71, Waite J).

 

Livesey (formerly Jenkins) v Jenkins [1985] AC 424, [1985] FLR 813 – Both parties owe a duty to the court and to each other to provide full relevant disclosure, as a matter of law; and which some have said gives the court an inquisitorial power (doubted by such eminent judges as Lord Nicholls and Lord Neuberger MR in other contexts). All relevant material must be before the judge before the court makes a decision.

 

Piglowska v Piglowski [1999] UKHL 27, [1999] 1 WLR 1360 [1999] 2 FLR 763 – This case makes a number of points of law by a great judge (despite his oversight in the Pinochet case), Lord Hoffman:

  • Only rarely should permission to appeal be given in respect of a discretionary decision;
  • It is inappropriate to criticise line-by-line an ex tempore judgement; and most important
  • A ‘free-wheeling’ approach (as adopted by the Court of Appeal) to judicial notice (ie assumptions about facts) was wrong: there must be evidence to prove a point sought to be established (Martin (BH) v Martin (D)[1978] Fam 12, [1977] 3 WLR 101, (1977) FLR Rep 444 at 450, CA)

 

White v White [2001] 1 AC 596, [2000] 2 FLR 981, [2000] UKHL 54 – With Miller/McFarlane one of two very important guideline cases: the sharing and the compensation etc principles explained by the House of Lords.

 

Miller v Miller; McFarlane v McFarlane [2006] UKHL 24; [2006] 1 FLR 1186

 

TL v ML and others (Ancillary Relief: Claim against Assets of Extended Family) [2005] EWHC 2860 (Fam), [2006] 1 FLR 1263 Nicholas Mostyn QC sitting as a High Court judge – This case is procedural law and explains how a case involving assets held on trust by third parties – ‘chancery issues’ – should be pleaded and conducted. It been approved since by eg eg in Edgerton v Edgerton and Shaikh [2012] EWCA Civ 181, [2012] 2 FLR 273.

 

Fraud and Imerman documents

 

Lifely v Lifely [2008] EWCA Civ 904 – This is not a financial relief case; but a story of two farming brothers who fell out. It is, however, an important anti-dote to such cases as Imerman v Tchenguiz and ors [2010] EWCA Civ 908, [2011] Fam 116, [2010] 2 FLR 814 and L v K (Freezing Orders: Principles and Safeguards) [2013] UKHC 1735 (Fam), [2014] Fam 35 (also UL v BK), Mostyn J which say lawyers must hand over to the other spouse documents ‘unlawfully’ taken by their client (‘Imerman’ documents). That is not what the lawyers for brother A did in Lifely (in my view correctly); for by doing so in that case they showed that brother B’s diary showed he may have lied to the court (see Sharland and fraud unravels all) at the hearing below.

 

Wyatt v Vince [2015] UKSC 14, [2015] 1 WLR 1228, [2015] 1 FLR 972 – By definition, and as a matter of law, a financial relief application cannot be set aside (Mr Vince is the eco-millionaire who is taking on the government in Scotland), whatever the rules might say. The court must exercise its discretion under MCA 1973 s 25, which it cannot do if it strikes out a case. Trying the case and making no order is different: then at least the s 25 factors have been considered.

 

Sharland v Sharland [2015] UKSC 60, [2016] AC 871, [2015] 2 FLR 1367 – As a matter of law, if a party has lied, no order based on the lie (or lies) can be allowed to stand and must be set aside (‘Fraud unravels all’ as Briggs LJ recalled in the minority in the Court of Appeal).

 

Waggott v Waggott [2018] EWCA Civ 727 (11 April 2018) – If a law student wants an example of an appeal which should probably not have got permission to appeal (ie an example of a decision in the discretion of the judge below), but who wants to be confused by lawyers dancing on a pin-head – this is a good one. It got to the Court of Appeal, engages 150 paragraphs of judgement (to turn down the appeal). And it will arise only very rarely (if at all) in anyone’s practice.

 

My advice to any lawyer starting out on a matrimonial financial relief career will be not to be bamboozled by the massive variety of reported financial relief cases. Spot the ones which help to define the law (the cases referred to above are important examples); and get the hang of the major guidelines cases such as White and Miller/McFarlane. Most of the rest is snippets of only marginal interest; and few judges – certainly at the district judge and circuit judge level – will thank you for providing them with irrelevant (or only tangential) extra reading.

 

The bones of most of the law for financial relief cases are in Matrimonial Causes Act s 25(1) and (2). Pick through those bones and make an order: that is discretion.

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