Financial Matters During Marriage
Trusts and Beneficial Owners | Co-ownership of Land | Personal Property | The Matrimonial Home | Rights of Occupations
Financial Provision During Marriage | Welfare Benefits | Child Support
These Family Law pages were originally prepared by the Law Department at St. Brendan's Sixth Form College.
They are no longer being updated and no responsibility is accepted for them by St. Brendan's College or LawTeacher.net
This Chapter was last updated on 3 August 2000
Before the Married Women's Property Act 1882 a woman's personal property was transferred automatically to her husband on marriage; her real property came under her husband's control but remained hers for inheritance purposes. According to Blackstone, writing in about 1765, the husband and wife were one person in law: the legal existence of the woman was suspended and incorporated into the personality of her husband. A husband could leave property to his wife in his will (because that would not take effect until after the marriage was ended by his death), but could not make a legal gift to her and was responsible for all her debts, whether contracted during the marriage or before.
Such rules have no effect nowadays, and for the past hundred years or so husband and wife have been treated as two legal persons each with his or her own property rights. Property owned by either spouse before the marriage remains the property of that individual (subject to any evidence of a contrary intention), and even property acquired after marriage (e.g. by earning, purchase, legacy or other gift) belongs prima facie to the person acquiring it, rather than to both together. There is no automatic "community property" rule in English law, such as exists in the laws of many American states, though there are various exceptions discussed below. Before going on, however, two areas of general law need to be addressed.
Trusts and beneficial owners
Trusts have been in existence for more than a thousand years, and even in pre-Norman times there are recorded instances of the conveyance of land to X to be held by him for the use of another. The common law disregarded such instructions and held the land to be the property of X absolutely, but from the early 15th century equity, acting in personam, began to compel the owners to carry out the terms of the use. The popularity of the use as a device for tax avoidance became such that in 1535 Parliament enacted the Statute of Uses, limiting their scope and requiring legal ownership to be transferred in most cases to the beneficiary of the use. The practice then grew up of transferring land to X for the use of Y in trust for Z, and when under the statute the land passed to Y it was still Z who derived the ultimate benefit.The beneficial or equitable owner of property, therefore, is not always the same as the legal owner. If property is held on trust, the legal owner is bound to deal with it for the benefit of some of other person or persons, possibly including himself. The commonest illustration of this idea in the field of family law occurs where the matrimonial home is owned by just one partner on paper, but where both partners have enforceable rights as to its use and disposal.
A trust may be created in various ways: express trusts are fairly easy to recognise, and implied trusts may arise where a person's words or deeds show the necessary intention. Resulting and constructive trusts are more difficult to grasp, though constructive trusts in particular have come to play quite an important role in family law, and statutory trusts come into effect in certain circumstances.
- Paul v Constance [1977] 1 All ER 195, CA
- P and D were cohabitees. D received �950 compensation for injuries suffered at work; he put this into a bank account in his own name alone (for the sake of appearances), but told P on several occasions that the money was "as much yours as mine". On D's death, P claimed the money from his estate, and the Court of Appeal upheld the judge's finding in her favour. In the context of the relationship this could be taken as an express declaration of trust for P and D in equal shares.
- Warren v Gurney [1944] 2 All ER 472, CA
- A father F bought a house for his married daughter P to live in; the house was conveyed to P, but F kept the title deeds and continued to speak as if the house was his. When F died 15 years later, P claimed the deeds as beneficial owner. The Court of Appeal said P owned the house on an implied trust for F's estate; F's retention of the deeds, and things he had said at the time of purchase, were enough to displace the presumption of advancement.
- Tinsley v Milligan [1993] 3 All ER 65, Times 28/6/93, HL
- P and D bought a house together using money from their joint business; they agreed that the house should be put into P's name so that D could (fraudulently) claim housing benefit. When they separated some years later, P claimed possession as the sole beneficial owner, arguing that the supposed contract between them was void. The House of Lords rejected this argument, and said P held the house on a resulting trust for herself and D in equal shares; D could show a contribution of half the purchase price and a common intention of joint beneficial ownership, and that was enough.
- Eves v Eves [1975] 3 All ER 768, CA
- An unmarried couple set up home together and had two children. A house was bought in the man D's name because P was under 21; he said (probably falsely) that he would have put it in their joint names had she been of age. The house was in a run-down condition, and P did a lot of heavy building work. After three years, D left to live with another woman. P sought and was granted a declaration that the house was held on a constructive trust for both of them; the work she had done, coupled with D's representations, entitled her to a quarter-share in its value.
Co-ownership of land
The law recognises two forms of co-ownership: the joint tenancy and the tenancy in common. (In this context, the word "tenant" can describe an owner-occupier as well as a lessee.) Under the Law of Property Act 1925, the legal estate in land is always held by joint tenants (or a single tenant) on a statutory trust, but behind this trust there may be either an equitable joint tenancy or an equitable tenancy in common, according to the circumstances of the case.For a tenancy to be recognised as a joint tenancy, the "four unities" must be present. There must be:
- unity of possession, each joint tenant being as much entitled to possession and enjoyment of any part of the land as any other tenant, and none having special rights;
- unity of interest, each joint tenant having an interest of the same kind and (if appropriate) of the same duration, and any rents or profits being divided equally between them;
- unity of title, each joint tenant having acquired his or her rights by the same conveyance or by simultaneous adverse possession; and
- unity of time, each joint tenant having acquired his or her vested interest at the same time.
Under a tenancy in common, on the other hand, the tenants hold in "undivided shares". Each tenant has a distinct fixed share in the property, which he can pass on by will or otherwise, as he wishes; these shares need not be equal in size. There must still be a unity of possession - each tenant-in-common has a right to enjoy any part of the property just as if he were the sole owner - but the other three unities required for a joint tenancy need not be present.
A beneficial joint tenancy can be converted to a beneficial tenancy in common by a process of severance. Such severance occurs automatically if a tenant acquires a further interest in the property, or sells or mortgages his interest to another, because the four unities are no longer present; it also takes place if one joint tenant unlawfully kills another, because he should not be allowed to benefit (by jus acrescendi) from his own crime. Severance can occur by the agreement (express or implied) of all the joint tenants, but s.36(2) of the Law of Property Act 1925 also allows any one joint tenant to give written notice to his co-tenants of his wish to sever his interest.
Personal property
So far as personal property (i.e. property other than land and buildings) is concerned, married couples are in much the same position as any two other people except when the marriage breaks down. Each of them separately can buy and sell his or her own property - one can even sell property to the other - and there is no general presumption of joint ownership. Money in a bank account in the name of one partner is generally presumed to be that partner's exclusive property, and if one partner buys property (including investments such as stocks and shares), the purchase is presumed (in the absence of other evidence) to belong to that partner alone.
- Samson v Samson [1960] 1 All ER 653, CA
- A married couple H and W disagreed as to the ownership of their wedding gifts (including some gifts of cash), and sought an order under s.17 of the 1882 Act (see page 30 below). The Court of Appeal rejected W's argument that wedding gifts are jointly owned; and said the determining factor is the donor's intention. If there is no other evidence of this, said Hodson LJ, the court may infer that gifts from friends or relatives of one partner were intended for that partner rather than the other.
Personal property originally belonging to one partner may be transferred to the other, or may become jointly owned by statute or by the creation of an express or implied trust.
- Paul v Constance [1977] 1 All ER 195, CA
- The facts are given above; in this case, P and D were cohabitees but the same principles would apply between married couples. D's repeated assertions that the money in a certain bank account was "as much yours as mine" was held to amount to an express declaration of trust for P and D jointly.
- Re Cole (a bankrupt) [1963] 3 All ER 433, CA
- A man H took his wife W to a new house and showed her the contents, saying "Look, it's all yours". On H's bankruptcy some 20 years later, W sought a declaration that the furniture was hers and could not be taken to satisfy the creditors, but her claim failed. The Court of Appeal, allowing an appeal from Cross J, said the facts were equivocal: it appeared there had been no delivery or actual transfer of possession, however, so (in the absence of consideration) the gift was incomplete.
- Married Women's Property Act 1964 s.1
- If any question arises as to the right of a husband or wife to money derived from any allowance made by the husband for the expenses of the matrimonial home or for similar purposes, or to any property acquired out of such money, the money or property shall, in the absence of any agreement between them to the contrary, be treated as belonging to the husband and wife in equal shares. [This section is very rarely used, and the Law Commission has recommended its repeal.]
- Jones v Maynard [1951] 1 All ER 802, Vaisey J
- A soldier H going on active service gave his wife W power to draw cheques on his account. On their subsequent divorce, W claimed half the balance in the account, and her claim was allowed. There was evidence, said the judge, that the parties intended to make a common pool of their resources: both H and W paid in their earnings (though H's contribution was greater) and drew cheques, and they spoke of "our savings". W was therefore entitled to half the balance of the account and to half the value of various investments purchased from it in H's name.
- Marshal v Crutwell (1875) LR 20 Eq 328, Jessel MR
- A man H in poor health converted his bank account to a joint account, giving his wife P power to draw cheques. P did subsequently draw on the account for household expenses, but always at H's direction. On H's death, P claimed the balance of the account by right of survivorship, but the judge said H had never intended to give P ownership. On the evidence, the joint account was solely for convenience and created no presumption of advancement.
- Re Figgis, Roberts v Maclaren [1968] 1 All ER 999, Megarry J
- The executors of T's estate sought judicial guidance on various points, including the ownership of money in a joint bank account. T already had a current account in his own name, and opened a deposit account in the joint names of himself and his wife W. This suggested that the deposit account was intended to be fully shared: a counter-argument that it was merely for convenience was rebutted by the fact that H alone controlled the account in fact, and that he continued it long after he returned from military service abroad. The presumption of advancement therefore operated to give W a half share in the account.
- Thompson v Thompson (1970) 114 SJ 455, CA
- An American H married a Chinese W and set up home in England. H transferred some money from his American resources to a joint account in England; this account was to be used to pay for the house, and would go to W in the event of H's death. W subsequently sought a divorce and claimed a half share in the house and the balance of the account under the 1882 Act. Affirming the Registrar's dismissal of her claim, Lord Denning MR said that where a joint account was supplied with money from each party so as to be a joint pool it was joint property belonging presumably to the parties in equal shares, as in Jones v Maynard above. But in the instant case the "joint account" remained H's property: he provided all the money and did not intend W to acquire any proprietory interest until after his death.
- Re Bishop [1965] 1 All ER 249, Stamp J
- A married couple H and W opened a joint account to which each contributed, though H's contributions were greater than W's. Each drew on the account for everyday expenses, and occasionally for the purchase of investments in individual names. On H's death, his trustees sought guidance. In the absence of contrary evidence, said the judge, a joint account for husband and wife can be drawn on for the partners' individual as well as joint benefit. It followed that W owned all the investments purchased in her name (but none of those purchased in H's name), as well as the balance in the account by jus accrescendi.
THE MATRIMONIAL HOME
For most couples, their most valuable asset is the matrimonial home, and given historic rates of inflation this can be a very valuable asset indeed. A house bought for �3000 in the early 1960s could easily be worth thirty times that today. The modern trend is for married couples to register the house in their joint names, but thirty or forty years ago that was less common, and equity may have to step in to resolve questions of beneficial ownership.It is not so much in cases of divorce that legal analysis is required: the courts have extensive discretionary powers to redistribute legal rights and obligations on divorce: the breakdown of cohabitation causes far more legal problems. But a spouse who dies after a long and happy marriage, or goes bankrupt with creditors pressing for payment, or mortgages the family home to obtain a loan for other purposes, may leave questions of ownership to be resolved. For example, a spouse who can establish a beneficial interest in the matrimonial home may be able to resist a claim for possession should the legal owner default on the mortgage repayments.
- Williams & Glyns Bank v Boland [1980] 2 All ER 408, HL
- H and W lived in a house registered in H's name, but W had provided some of the purchase price. Without W's knowledge, H obtained a bank loan using the house as security; when he defaulted, the bank claimed possession. The House of Lords said W was a beneficial owner (under a resulting trust) in actual occupation of the house, and so had an "overriding interest" under s.70(1)(g) of the Land Registration Act 1925; the bank's charge on the house was subject to that interest.
In broad terms, a resulting trust may arise where a person other than the legal owner contributes to the purchase price. This person might be a spouse or cohabitant of the legal owner, or it might be some other relative such as a parent or (in the case of an elderly owner) an adult child. The contribution might be made at the time of the initial purchase, or (very often nowadays) might be made by meeting the mortgage repayments as they fell due.
- Hussey v Palmer [1972] 3 All ER 744, CA
- A woman P sold her own house and went to live with her married daughter D. P paid for the building of an extension to D's house, to be used by P. Six months later, P moved out after a disagreement and claimed the value of the extension under a resulting trust. The trial judge refused and said the money paid should be regarded as a loan to D, but the Court of Appeal disagreed and said there was a resulting trust because justice and good conscience so required. (Phillimore LJ said obiter that a resulting trust was not inconsistent with the judge's finding of a loan.)
- Marsh v Von Sternberg [1986] 1 FLR 526, Bush J
- A woman D became engaged to P, who moved into D's flat. P and D then bought a long lease on the flat (at a discounted price because D was a sitting tenant); D paid the deposit of �5000 and P began to make repayments on the mortgage for the balance. When they split up, P sought a declaration that the flat was owned in equal shares, and D counterclaimed that it was entirely hers. The Registrar awarded P a 4% share, based on his actual repayments of �500 to date, but Bush J said on appeal that P should have a 25% interest based on the parties' agreement (on the evidence) to share responsibility for the mortgage.
- Lloyds Bank v Rossett [1990] 1 All ER 1111, HL
- H bought a house with the aid of an overdraft, using the house as security. Some 18 months later H left his wife W and defaulted on the repayments; the bank sought possession, and W (who had done substantial renovation, and was still living in the house) claimed a beneficial interest. The House of Lords held on the facts that she was not entitled to such an interest. The first and fundamental question, said Lord Bridge, is whether prior to purchase (or exceptionally at some later date) there has been any agreement or understanding between the parties that the property is to be shared beneficially, on which the claimant has acted to his or her detriment. In the absence of an express agreement, he said, it is at best extremely doubtful whether anything short of a direct contribution to the purchase price would justify the court's drawing an inference of such an intention.
- Pettitt v Pettitt [1969] 2 All ER 385, HL
- W bought a house in her own name; H laid out the garden and did a substantial amount of redecoration. On divorce, H claimed a beneficial interest in the house, but his claim was rejected. Lord Reid said "family property" is a concept unknown to the law, and in the absence of any agreement a spouse who does work or spends money on the property of the other acquires no claim. In the instant case, the "improvements" were the sort of work that a husband might well be expected to do, and so gave H no interest.
- Cooke v Head [1972] 2 All ER 38, CA
- D and his mistress P obtained land on which they planned to build a bungalow for their joint use. The labnd was, paid for by D and registered in his name, but P shared in the heavy building work and her earnings went towards the mortgage repayments. When the bungalow was nearly finished P and D separated, and P claimed a share in the value of the property. Plowman J awarded P a one-twelfth share, but the Court of Appeal increased this to one-third. Whenever two parties by their joint efforts acquire property for their joint use, the courts may impose a constructive or resulting trust.
- Eves v Eves [1975] 3 All ER 768, CA
- The facts are set out 24 above. Awarding P a quarter share in the value of the home, Lord Denning MR relied on pure equity while Browne and Brightman LJJ cited D's trickery and P's reliance. Although there had in fact been no common intention to share, D had told P he had such an intention and so was estopped from denying it.
- Burns v Burns [1984] 1 All ER 244, CA
- M and W cohabited for nearly 20 years, living in the same home for most of that time. The house had been bought by M and was in his name; W did the usual domestic duties, redecorated periodically, and put some of her own earnings into housekeeping expenses. On the breakup of the relationship, W claimed a beneficial interest in the house, but her claim failed. The Court of Appeal said since she had not contributed to the original purchase, it could not impute a common intention that she should acquire such an interest.
- Grant v Edwards [1986] Ch 638, CA
- D bought a house for himself and P, leaving P's name off the conveyance ostensibly to avoid any problems during her imminent divorce proceedings. After a fire in the house they shared the insurance money equally, and when they split up P claimed a half-share in the house. Her claim succeeded: the Court of Appeal said P's substantial contributions to general household expenses were well in excess of what would have been expected, and allowed D to meet the mortgage repayments; moreover, the sharing of the insurance money showed a common intention that she should have a half share. Whether D ever actually had such an intention is doubtful, but he was estopped by his representations from denying it!
- Drake v Whipp [1996] 1 FLR 826, CA
- P and D together bought an old barn, intending to convert it into a house for their joint occupation. P paid 40% of the purchase price and D paid 60%, but D subsequently spent a considerable amount on the costs of conversion before the property was finally conveyed to him. When P and D separated, P claimed 40% of the sale value on the basis of a resulting trust, but the trial judge took into account D's subsequent contributions and awarded her only 19%. Allowing P's appeal in part, the Court of Appeal said she should have a one-third share. Once a common intention to share the property had been established, said Peter Gibson LJ, the resulting trust was displaced by a constructive trust, and the court could exercise its discretion in deciding what share would be fair.
In making any such order, the court is required by s.15(1) to have regard to factors including the settlor's intention (where the trust was created by a strict settlement), the purposes for which the property is held, the interests of any child who occupies or might reasonably be expected to occupy the property, and the interests of any secured creditors. The Act came into force in January 1997 and has not yet generated any case-law of its own, but the Law Commission has expressed the view that many of the decisions based on s.30 of the Law of Property Act 1925 (which these two sections replace) are still relevant.
- Jones v Challenger [1960] 1 All ER 785, CA
- H and W bought a house for their joint use, each contributing half the purchase price. H subsequently divorced W because of her adultery, and W remarried. H remained in the matrimonial home, and W sought an order for its sale and the division of the proceeds. The Court of Appeal said the house had been bought as a matrimonial home and that purpose no longer existed; the order should therefore be granted.
- Rawlings v Rawlings [1964] 2 All ER 804, CA
- W deserted her husband H after some thirty years' marriage, leaving H in the jointly-owned matrimonial home with their son, then aged 21. Two years later W sought an order for the sale of the property and the division of the proceeds. Affirming the Registrar's order to that effect, the Court of Appeal said that although the marriage had not ended in law (no divorce proceedings having been brought) it had ended in fact. But Salmon LJ said obiter that had there been young children the position would have been different, as one of the purposes of the trust would have been to provide a home for them.
- Bedson v Bedson [1965] 3 All ER 307, CA
- H and W had three children aged 13, 11 and 9, and lived in a flat above a draper's shop. The property was owned by H and W in equal shares; the draper's business was owned by H alone, but he paid W a weekly wage for her help in the shop. W left H, taking the children with her, and sought an order for the sale of the property and the division of the proceeds. The Court of Appeal refused to make an order for sale that would lead to H's being turned out of the premises where he ran his business; it set aside an order of the County Court judge for W to transfer her interest to H on payment of a lump sum, and substituted an order that H should pay a weekly sum to W in recognition of her interest.
- Re Holliday [1980] 3 All ER 385, CA
- H and W had three children under 15; the matrimonial home was owned by them as joint tenants. H deserted W to live with another woman, and W was granted a divorce. W sought a property adjustment order, and on the same day H filed a bankruptcy notice (apparently with the main purpose of defeating W's claim). H was duly adjudged bankrupt, and his trustee sought an order for the sale of the property. The trial judge granted such an order, and W appealed. The Court of Appeal said the court should look at all the circumstances and consider which of the competing claims (that of the trustee seeking to realise the husband's share in the house for the benefit of his creditors, or that of the wife seeking to preserve a home for herself and the children) ought to prevail in equity. In the circumstances, the court would order that the house should not be sold without the wife's consent until the two eldest children were over 17.
- Re Citro (a bankrupt) [1990] 3 All ER 952, CA
- Two brothers in business together went bankrupt, and their trustee sought orders for the sale of their respective matrimonial homes. The judge granted the orders, but imposed a proviso that they were not to be enforced until the youngest children (aged 10 and 12 respectively) reached the age of 16. Allowing the trustee's appeal, the Court of Appeal said the rights of creditors should normally prevail over those of a bankrupt's spouse unless there are exceptional circumstances. The fact that the spouse is a wife with young children, who will face hardship if evicted, is not an exceptional circumstance; the proviso would therefore be amended to require a delay of no more than six months.
Rights of occupation
Quite separate from questions of legal or beneficial ownership is the right to occupy the matrimonial home. Under s.1(1) of the Matrimonial Homes Act 1983 and s.30(2) of the Family Law Act 1996 (which consolidated earlier legislation) a non-owner spouse has a statutory right to occupy the matrimonial home, and cannot be evicted by the owner unless the court so orders. Under s.2(1) of the 1983 Act or s.31(10) of the 1996 Act, such "matrimonial home rights" can be registered as a charge on the property, and once registered is effective against any third party who subsequently buys the property.Under s.1(5) or s.30(3), a non-owning spouse with rights of occupation is entitled to pay rent, mortgage repayments and similar payments due from the owner, which must be accepted as if tendered by the owner. For example, a wife deserted by her husband can continue living in a flat let to the husband, and so long as she keeps up the payments of rent she has security of tenure under the Rent Acts and cannot be evicted without a court order.
A spouse with no legal interest in the matrimonial home, or a former spouse, or even a cohabitant, may apply to the court for an "occupation order" affirming her right to occupy and (if appropriate) excluding the other from all or part of the premises. This section can therefore be used inter alia in cases of domestic violence to exclude the violent partner (who may in fact be the legal owner). This matter is discussed in more detail in another chapter.
Enforcement procedures
There are various ways of resolving a dispute between husband and wife as to the ownership of property. Since most such disputes arise in connection with divorce, a very common practice nowadays is to rely on the courts' general power when granting a divorce to adjust property rights as seems appropriate. Disputes do arise in other situations, however, as for example when one partner is declared bankrupt and the creditors seek possession of his assets.
- Married Women's Property Act 1882 s.17 (as amended)
- In any question between husband and wife as to the title to or possession of property, either party may apply by summons ... to the High Court or such county court as may be prescribed and the court may, on such application ..., make such order with respect to the property as it thinks fit. [Under s.39 of the Matrimonial Proceedings and Property Act 1970, such an application may be made up to three years after the marriage has been annulled or ended by divorce, and under s.2(2) of the Law Reform (Miscellaneous Provisions) Act 1970 a similar application can be made within three years of breaking off an engagement.]
- Pettitt v Pettitt [1969] 2 All ER 385, HL
- The facts are given above. The House of Lords said s.17 allows the court to declare existing rights, not to create new ones. The breakdown of a marriage does not of itself alter the ownership of property, said Lord Morris, and so far as s.17 is concerned it is the parties' rights at the time of purchase that are important.
- Matrimonial Proceedings and Property Act 1970 s.37
- It is hereby declared that where a husband or wife contributes in money or money's worth to the improvement of real or personal property in which ... either or both of them has ... a beneficial interest, the husband or wife so contributing shall, if the contribution is of a substantial nature and subject to any agreement between them to the contrary ... be treated as having then acquired ... a share or an enlarged share ... in that beneficial interest of such an extent ... as may seem in all the circumstances just to any court before which the question ... arises.
FINANCIAL PROVISION DURING MARRIAGE
At one time, the common law rule was that a husband had a duty to maintain his wife, but acquired as his own all her property acquired before the marriage. The modern rule is that spouses retain their own property as described above, but have mutual obligations of financial support both during the marriage and (potentially) after it is ended by divorce. Cohabitants have no such obligations towards one another, though they do have financial responsibilities towards their children.
- Windeler v Whitehall [1990] 2 FLR 505, Millett J
- A woman P was the mistress of D; she looked after D's house where they lived together, but made no financial contribution and played no part in D's successful theatrical agency. When their relationship broke up P moved out and claimed a legal interest in the house and the business. Dismissing her claim, the judge said a husband has a legal obligation to support his wife even if they are living apart, but has no legal obligation to support his mistress even if they are living together.
Under s.2 of the Domestic Proceedings and Magistrates' Courts Act 1978 the magistrates can order one spouse to make financial provision for the other. Such an order may require periodic payments of any appropriate amount, and/or payment of a lump sum not over �1000, but the magistrates cannot by order change the ownership of other property.
Either party can apply for an order for periodic payments and/or a lump sum, on the grounds (set out in s.1 of the Act) that the other spouse
has failed to provide reasonable maintenance for the applicant, or
has failed to make a propert contribution towards reasonable maintenance for a child of the family, or
has behaved in such a way that the applicant cannot reasonably be expected to live with him/her, or
has deserted the applicant.
In deciding whether to exercise their powers under s.2, the magistrates must have regard to all the circumstances of the case, first consideration being given to the welfare of any child under 18. They must also consider the income, earning capacity, property and other financial resources of each of the parties, to their respective financial needs and obligations, to their standard of living before the events giving rise to the application, to their respective ages and states of health, to the duration of the marriage and the contribution each partner has made (and is likely to make) to family welfare, and to the conduct of each party where it would be inequitable to disregard it. An order can be enforced by attachment of earnings (whether or not the payer has defaulted), or as a last resort by the issue of a distress warrant or committal to prison for contempt of court.
The magistrates also have power under s.6 of the Act to make a consent order for periodic payments and/or an unlimited lump sum, where the other spouse has agreed to make such payments and the order would not be contrary to the interests of justice. At one time there were significant tax advantages in making payments under such an order rather than voluntarily, but these advantages have largely vanished and consent orders are consequently now very rare. Where the parties have been living apart for three months or more by mutual agreement (i.e. neither has deserted the other), and one has been making periodic payments to the other during that time, the magistrates have power under s.7 to order the continuation of those payments. Again there were originally tax advantages in obtaining such an order, as well as a measure of security for the recipient, but these orders too are rarely granted nowadays.
Under s.27 of the Matrimonial Causes Act 1973 a party to a marriage can apply to the High Court or to a county court with divorce jurisdiction for an order for periodic payments and/or a lump sum for the reasonable maintenance of the applicant and/or a child or children of the family, if the respondent has failed to make provision for such maintenance. The court must consider the same factors as those set out in s.1 of the Domestic Proceedings and Magistrates' Courts Act 1978. Such applications are very rare: there were only 71 in 1989, and subsequent judicial statistics reports do not identify them separately at all.
The parties to a marriage are of course free to make their own agreements about financial provision, and in the event of separation (short of divorce) may decide to formalise these agreements in a binding contract. Such a contract may be oral or written and is subject to the same rules of law (e.g. as to certainty, consideration, &c) as any other contract, but the courts will be particularly anxious to ensure there was no duress, misrepresentation or mistake involved in its making. Under s.34(1) of the Matrimonial Causes Act 1973 any term purporting to oust the jurisdiction of the courts (e.g. by preventing one party from applying for additional or alternative financial provision) is void, and s.6 of the Child Support Act 1991 requires a parent claiming any welfare benefit to authorise and assist in proceedings to obtain child support payments from the absent parent notwithstanding any private agreement between them.
- Edgar v Edgar [1980] 3 All ER 887, CA
- After eight years' marriage, a wife W decided to leave her wealthy husband H, taking their four children with her; H was reluctant, but was prepared to agree so long as the children had a suitable alternative home. After negotiations through solicitors, H and W executed a separation deed: H was to buy a house for W in her name and pay her a lump sum of �100k and annual payments of �16k in addition to child support. In return, W undertook not to make further financial claims in the event of divorce. H carried out his part of the agreement fully, but when W petitioned for divorce two years later she sought a further lump sum payment under s.23(1) of the Matrimonial Causes Act 1973. The trial judge ordered H to pay a further �670k, but the Court of Appeal set this order aside. Although H was in a stronger bargaining position because of his wealth, he had not exploited that position to induce W to act to her disadvantage. On the contrary, it was W who (against the advice of her solicitors) had pressed for the separation deed and had voluntarily agreed not to claim a lump sum or other payments on divorce.
Welfare benefits
A number of welfare benefits are available to support a family in financial need, including the following:Income support is available to anyone who is in paid work for less than 16 hours per week, who is a lone parent, a carer, disabled, or sick and unable to work, but whose current income is below a predetermined level. A single person is entitled to �29.60 to �49.15 per week (depending on age), and a couple to �58.70 to �77.15 (ditto), with additional payments for single parents, children, and various special circumstances, but the benefit payable is reduced in line with the family's income and savings. Income support is not available to anyone who works more than 16 hours a week (but see family credit below), is a full-time student, or has savings over �8000.
Family credit is intended to provide extra help for low-earning families with children. Where one parent (or a single parent) is working for at least 16 hours a week she can claim �47.65 a week, with an extra �10.55 if the claimant or her partner is working at least 30 hours a week. Further benefits of between �12.05 and �24.80 (depending on age) can be claimed for each child. No family credit is payable if the family has capital over �8000, and deductions are made if the family's net weekly income exceeds �77.15 (though child care expenses up to �60 a week are deductible) or its capital exceeds �3000.
Child benefit (no means test) is payable to a person responsible for a child living with them, or contributing significantly to the child's maintenance. The child must be under 16, or 16-19 but still in full-time education, and the benefit is currently worth �11.05 per week for the eldest child (�17.10 where the claimant is a single person) and �9.00 for each subsequent child.
Child support
Under s.1(1) of the Child Support Act 1991, which came into force in 1993, each parent of a ... child is responsible for maintaining him. An absent parent (that is, a parent other than the person with whom the child lives) can discharge this responsibility by making periodical maintenance payments as determined under the Act. The day-to-day enforcement of the Act rests with the Child Support Agency, which has the duty of assessing the appropriate amount of maintenance in any individual case (using statutory formulae with very little room for the exercise of disctretion) and, where necessary, enforcing payment.A caring parent in receipt of income support or family credit (or certain other benefits) may be required to seek child support through the CSA, and benefit payments may be reduced for non-compliance unless the CSA believes the caring parent or the child would be at risk of harm. Other caring parents may apply if they wish: the existence of a maintenance agreement (no matter in what terms) does not preclude such an application unless the agreement was made before the Act came into force. For the purposes of the Act, the usual common-law presumption that a married woman's husband is the father of her child does not apply: if he denies paternity, it will normally be necessary to prove it before an order can be made.
In determining the amount payable, the CSA takes into account the cost of maintaining a child, the income of each parent, and the costs of any other children either parent may have, and seeks to ensure that the absent parent does not have to pay more than 30% of his income and is still significantly better off than he would be on income support. New partners of either parent are not expected to contribute to the support of children who are not their own. The CSA has facilities for collecting and passing on payments, and for enforcing payment in cases where the absent parent is reluctant to comply.
The 1991 Act drastically reduces the role of the courts in child support matters, limiting them in practice to lump sum and property adjustment orders. Under s.15 and Sch.1 of the Children Act 1989, which survive the 1991 legislation, the court may make a financial support order against a parent of any child and may order such a parent to transfer to the child (or to another person for the child's benefit) such property as the court may specify.
- Re J (1992) Times 12/11/92, Eastham J
- Following the breakdown of their relationship, a mother M sought an order under s.15 requiring her cohabitant C to transfer to her his interest in the joint tenancy of their home "for the benefit of the child". The judge said he had no jurisdiction to make such an order except against the child's parent: since C was not the child's biological father, nor M's husband, nor a person with parental responsibility for the child, he could not be regarded as a "parent".
- R v Secretary of State ex p W (1999) Times 19/5/99, Johnson J
- Some time after ending cohabitation with a woman W, a man S sought and was granted (by consent) a parental responsibility order in respect of W's two daughters, but subsequently denied paternity when questioned by the Child Support Agency. W then sought judicial review of R's decision that he had no power to make a maintenance order without a judicial finding that S was in fact the father. Granting certiorari to quash the decision, the judge said the district judge at the original hearing could not properly have made the parental responsibility order in the circumstances unless he had been satisfied that S was the father, and that was sufficient "finding" for the purposes of the Child Support Act.
