Hanlon v law society

Introduction

In Hanlon v Law Society , Lord Denning stated that the court “takes the rights and obligations of the parties all together and puts the pieces into a mixed bag. Such pieces are the right to occupy the matrimonial home or have a share in it, the obligation to maintain the wife and children, and so forth. The court then takes out the pieces and hands them to the two parties – some to one party and some to the other – so that each can provide for the future with the pieces allotted to him or to her. The court then hands them out without paying any too nice a regard to their legal or equitable rights but simply according to what is the fairest provision for the future, for mother and father and the children.”

In this essay I will try to outline how the role of the Court has evolved in the area of ancillary relief through the years. At first, it would be necessary to understand exactly what ancillary relief is, who is entitled to it, what its purpose is and how this family issue is connected with the Court.

Ancillary Relief

When discussing Family Law, particularly the Law concerning divorce, nullity or judicial separation, by ancillary relief we mean the financial proceedings ancillary to divorce; a pecuniary payment made to a party to a marriage. It is important to note that since the Civil Partnership Act came into force all principles applied on a divorce between a husband and wife are also applied on judicial separation between Civil Partners. The Court is able to make a variety of orders in its decision that can be divided into income orders, property orders, interim orders and clean break orders all of which are provided within the Matrimonial Causes Act 1973 and its amendments.

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Who is entitled to it?

It is awarded to the party which is in a worse condition financially. As Butler-Sloss LJ stated in Dart v Dart , “The Matrimonial Causes Act 1973 provides the jurisdiction for all applications for ancillary relief from the poverty-stricken to the multimillionaire. It is obvious that a court, in the exercise of the discretion provided by ss 25 and 25A, will apply the relevant criteria according to the widely differing facts of each case before it.” Of course, whoever the weaker party is, it is entirely on the Court’s discretion and there are various criteria in assessing this, like childcare, actual income and income capabilities. Unfortunately it is almost always presumed that party to be the wife.

The Court Interference

The Court’s involvement with this subject began with the Matrimonial Causes Act 1857, which replaced the jurisdiction of the ecclesiastical Courts. For more than a century no real changes had been made to this, until 1970 and the Matrimonial Proceedings and Property Act. Thorpe LJ commented at that point that the new legislation reflected a “profound social change and compelling social needs”. Finally in 1973 came the new Matrimonial Causes Act, the legislation that is currently governing the issues considered by the Court, along with its later amendments

The purpose

Although the Act has no overall objective, both Lord Denning in Hanlon v Law Society and Lord Nichols in White v White have stated that the Court’s objective and the Act’s overriding purpose is to achieve fairness. The latter came to add later in Miller-MacFarlane that ‘fairness is an illusive concept’. Observing the course of things through the cases of the next years we see that their statements have been a starting point, or a stepping stone if you prefer that connected the old views of the Court with the new ones. Indeed at the time, the Court’s priority was to give out a decision that would be fair just and reasonable for all parties. Baroness Hale modified their statements saying that ‘the ultimate objective is to give each party an equal start on the road to independent living’, reflecting the gradual shift from ‘fair, just and reasonable’ to equality.

According to Eekelaar there are two situations implied by equality: equality in relation to the outcome, where at the end of the each spouse should have the same total value of assets; and equality of opportunities, where at the end each spouse should be in an equal position to take advantage of any opportunities to enhance their economic position in the labour market . In White v White again, Lord Nichols explained that the Court should depart from equality only when there is a good reason for doing so. Such reasons are the needs of the parties , extraordinary contribution , obvious and gross misconduct , parental contribution and or inheritance , inherited property , difficulties in liquidation, to ensure there was adequate compensation for losses caused during a relationship to a spouse and to achieve a clean break.

Indeed, the purpose of awarding an ancillary relief is to reallocate the family assets between the two ex spouse in order to allow them to carry on living with as less difficulties as possible.

It is important to keep in mind that not all divorced couples end up arguing in Court over ancillary relief. Assuming the two sides are able to reach an agreement, their solicitors draw up the Ancillary Relief and the order is sent to the Court along with a brief statement of each of the parties’ financial circumstances. A District Judge then approves the order, or raises a query which has to be dealt with and the order must be re-submitted. Likewise, when the parties have been unsuccessful to come to an agreement, they can again make an application to the court in order to resolve issues relating to family assets.

The Court interferes in this seemingly family issue not to punish any of the parties, but to protect the financial interests of the spouse or the civil partners. This is urgent since a divorce or dissolution can ruin the lives of the spouse both emotionally and financially, but mostly affect the future of their children, if there are any. As mentioned earlier it can interfere giving out various orders.

Income orders are further divided into secured periodical payment orders and unsecured periodical payment orders and these payments can be made per week, month or year. Where secured payments are not made, the property providing the security can be sold in order for the payments to be made, providing certainty this way. Also such payments continue after the death of the payer. In the case of remarriage of the recipient such order ceases to be made, excluding the situation of cohabiting. It can be terminated after the passing of a specific date set by the Court. Unsecured payments differ in that they can cease on the death of either party and that there is nothing to guarantee the continuity of the payments.

Property orders are also divided into three kinds. Lump sum orders being the first, they resemble periodical payment orders as usually involve capitals. It can be paid in installments and are made to a parent for the benefits of a child. The second is a transfer of property order. The most common type of this order is the one of the transfer of one party’s share in the matrimonial house to the other, and also to transfer ownership of a property. The third is the power of the court under s 24A of the MCA 1973 to order the sale of the property which either spouse owns jointly or outright. Once the owner sells the property then the Court proceeds to divide the value between them by means of an LSO.

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Interim order or maintenance order is an order requiring either party of the marriage to make to the other such periodical payments for his or her maintenance and for such term, being a term beginning not earlier than the date of the presentation of the petition and ending with the date of the determination of the suit, as the court thinks reasonable. This helps the weaker party financially in keeping up with the Court expenses. It was noted that parties which did not have sufficient means to pay their lawyers and cover the Court expenses where much easier to be induced into an unwanted agreement, purely because of despair.

The Court is furthermore under a duty to consider “whether it would be appropriate to exercise powers that the financial obligations of each party towards the other will be terminated as soon after the decree as the court thinks just and reasonable” under s.25A of MCA 1973. If such an order is made, it ends any continuing obligation between the spouses and neither party would be able to make any further applications to the court. This entails that the parties are free to pursue their careers without fear that their actions will result to vary maintenance payments, a lump sum clean break arrangement allows the recipient to remarry, without bearing the risk of losing maintenance and future problems in the payment and collection of periodic payment can be avoided. Furthermore many parties feel that they are not completely released from the marriage until all financial issues have been resolved which is achieved faster with a clean break. It also entails that the Court cannot reopen the case.

In order to help the judges decide what order is best suited for each case, s 25 of MCA 1973 lists the factors that the judges should take into consideration, but also gives them discretion wide enough to chose a factor not listed in s 25 if they consider it to be relevant.

Amongst those factors, as it was clarified in Sutter v Sutter and Jones, priority should be given to the welfare of any children of the family that have not yet attained the age of eighteen. As Baroness Hale put it in the joint case of Miller and McFarlane, the aim is to establish “a stable home for the children”. In addition to this factor, also important are the contributions that each of the parties have made or is likely to make in the foreseeable future to make for the welfare of the family, including any contribution by looking after the home or caring for the family .

Some other factors that are taken into account are; the income, earning capacity and resources under s.25 (2)(a) in relation to the financial needs, obligations and responsibilities that either party has or will have in the foreseeable future; the standard of living enjoyed by the family before the breakdown of the marriage ; mental or physical disabilities ; the conduct of each of the parties if it would be inequitable to disregard it . Adultery is excluded from this factor ; the value of lost benefits, like pension, which by reason of the dissolution or annulment of the marriage that party will lose the chance of acquiring.

Conclusion

It is more likely that Lord Denning’s statement in Hanlon v Law Society is not valid today. This is because although he speaks about fairness between husband wife and children, we see that this is not often the case. In fact it is no secret that the Court, having in mind socioeconomic surveys and other facts of our age, departs from its duty to give a clean break order all too often and gives priority to the welfare of children, then of the wife, leaving the husband usually in the disadvantageous obligation to maintain all three of the parties. As Baroness Deech put it, “the notion of the wife should get half of joint assets of a couple after even a short, childless marriage has crept up on us without any parliamentary legislation to this effect. Judges are ignoring the statutory direction to try to achieve a “clean break” between divorcing couples”.

This is done because, as I mentioned earlier, it is a common assumption to believe the wife to be the weaker party in a divorce. Much ink has been spilt discussing and analyzing the social reasons behind this common assumption. This assumption is partly correct, as indeed women by nature are more likely to give up or postpone their careers for the sake of keeping their house in order and raise their children properly, hence decreasing their working years, experience and promotion opportunities when they decide to go back to work.

Of course this can be argued both ways, as the latter explanation makes it seem like women are forced or are obliged to do so. This should have no value in Law, as there is no legislation providing or implying that it is the wife’s duty to take care of children, neither any to prevent the husband from doing so. It is crucial for the Court not to be trapped in such assumptions and take the facts of each case separately, something which judges themselves claim to be doing, empowered by the wide discretion bestowed to them by the MCA 1973.

Depending on how you look at it, the current situation can be considered successful, since it protects the weaker parties, but also unfair, since we live in an era where human rights and in our situation women rights have progressed in such extend where they are considered equal to men in all areas and hence, treating them as “weaker” essentially undermines this progress. In extreme situations the system might be even accused for reverse discrimination against husbands and that it is heading to a state where husbands will eventually be the weaker party. This would be going backwards, something that can be avoided again by taking each case individually and reaching the best suited for all decision without any prejudice in favor or against either of the parties.

Bibliography

Case Law

• Hanlon v Law Society [1981] AC 124, 146 (CA),
• Dart v Dart [1996] 2 FLR 266
• Miller v Miller [2006] 2 FCR 213
• McFarlane v McFarlane [2006] 2 AC 618
• Cowan v Cowan [2001] EWCA Civ 679
• Lambert v Lambert [2002] EWCA Civ 1685
• B v B (Financial Provision: Welfare of Child and Conduct)
• White v White [2000] 2 FLR 981, [2000] 3 FCR 555
• Re V (Financial Relief: Family Farm)
• R v R (Lump Sum Payments) [2004] 1 FLR 7
• Ram v Ram (No.2) [2004] 3 FCR 673
• RP v PR [2008] 2 FCR 613
• C v C (Financial Provision: Short Marriage) [1997] 2 FLR 26, [1997] 3 FCR 360 CA
• Watchel v Watchel [1973] Fam 72
• Duxbury v Duxbury [1987] 1 FLR 7

Statutes

• Matrimonial Causes Act 1973
• Civil Partnership Act 2004
• Matrimonial Causes Act 1857
• Matrimonial Proceedings and Property Act 1970

Books

• Jonathan Herring, Family Law (4th Edition, Longman Law Series, 2009)
• Mika Oldham, Blackstone’s Statutes on Family Law 2009-2010 (18th edition Oxford University Press, Oxford, 2009)