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The Erosion of White v White?

The Erosion of White v White?

The front page headline of The Times of 25th May 2006 trumpeted “The rewritten rules of marriage and divorce” and declared:

“All couples were advised last night to sign prenuptial agreements before getting married after a landmark ruling that gives wives much bigger divorce settlements.”

This referred, of course, to the much-awaited decision of the House of Lords in Miller v Miller, McFarlane v McFarlane[1]. However, while correctly acknowledging the seminal nature of the judgments, the print media advice in respect of prenuptial agreements probably remains as generally unhelpful as it had been hitherto.

The principles according to which the court is required to divide marital assets following divorce are well-known: section 25 of the Matrimonial Causes Act 1925 directs that regards should be had to “all the circumstances of the case” giving “first consideration” to the welfare, while a minor, of any child of the family who is under the age of 18. Thereafter and specifically, the factors listed in s.25(2)(a) to (h) must be weighed and applied with due regard being had to the desirability of achieving a “clean break” as stipulated by s.25A.

Even the most naïve of practitioners soon realises that a tidy academic balancing of those criteria is impossible in many cases since there will be insufficient assets to fund the comfortable metamorphosis of one household into two and the pre-eminent need to “keep a roof” over the heads of the children of the family will most often militate in favour of a spouse (usually female) with care of those children irrespective of the operation of the other required statutory considerations.

At the other end of the spectrum lies the less frequent “big money” case where all the necessary stipulations can be fulfilled within the constraints of substantial family assets and still leave as surplus for equitable division. Such cases are equally, if not more problematic; White v White[2] was such a case. Before amendment, s.25 required that the parties be placed as nearly as possible into the position that they would have enjoyed had the marriage not broken down. This was deleted in 1984 presumably on grounds of impracticality. Accordingly, White was seen as important guidance as to replacing principles. In an oft-quoted passage, Lord Nicholls recommended the application after due consideration of the other factors of a “yardstick of equality”. Cooke[3] opines that this does not introduce equality as a presumption or even a starting point but that Lord Nicholls is saying:

“…in each case, the judge must ask himself, ‘why not an equal division?”.

Doubt was cast upon the force of this approach in Cowan v Cowan[4] in which the Court of Appeal substantially increased an award to wife preferring “fairness” that would be achieved by application of the s.25 criteria particularly in situations in which there would otherwise be discrimination against the wife as “homemaker”.

However, a blow in the other direction was struck in Lambert v Lambert[5] in which the Court of Appeal rejected claims of a “special contribution” by one spouse to the family wealth in anything other than highly exceptional cases and once again stressed the need not to denigrate the contribution of the “homemaker” by comparison with that of the “breadwinner”. A 50% division was held on appeal to be appropriate.

Nonetheless, courts of first instance have been willing to find such exceptions as exemplified by Sorrell v Sorrell[6] in which Bennett J was prepared (at para.17) to find a “rare, if not unique, combination of inspiration, innovation, courage and hard work”. Again, however, the place of this particular set of family circumstances in the ancillary relief cosmos should be noted (para.126): the wife who was “discriminated against” would have had to spend at the annual rate of £1.06 million until the age of 88 in order to exhaust the provision made for her!

The conjoined appeals from the Court of Appeal decisions in Miller[7] and McFarlane[8] were heard by the House of Lords in January/February this year with judgments being delivered on 24th May 2006. The decision has provoked a near-hysterical reaction from supporters of the industrious husband against the spendthrift wife and reinforced the concept of working against the so-called discrimination against the homemaker. Detailed rehearsal of the facts of these appeals is not possible within anything like the word limit allocated hereto and given the novelty of this ruling more mature analysis by commentators than that at the opening hereof is awaited. However, it is significant that in Miller a substantial award to the wife was upheld against challenge despite the brevity of the marriage (less than 3 years). While it was commonly accepted that the significance of the financial contributions made by each party to a marriage would become eroded by years of joint marital endeavour, the defence of the allocation of so high a proportion of assets after such a short marriage is relatively novel and despite the somewhat “tongue in cheek” assertion by Baroness Hale (at para. 146 that “a domestic goddess self-evidently makes a ‘stellar’ contribution”, the upholding of an award to Mrs Miller of some £5m represents a significant lurch toward Lord Nicholls’ equality yardstick. Similarly, in the case of Mrs McFarlane, the fact that not only was maintenance of some £250,000 per annum upheld but a previous cap upon the period for which she would receive such contributions (5 years) removed propels such cases far beyond a limitation on the grounds of need. Lord Nicholls acknowledged (at paras.98-9) that such a figure “substantially exceeds the wife’s needs” but asserted:

“Her compensation claim is not needs-related; it is loss-related.”

It may therefore be concluded that the ultimate outcome of the Miller/McFarlane litigation, while not necessarily supplying an express endorsement of White principles is certainly a body-blow to any suggestion that they are subject to continued erosion. Conversely, media claims that the decision spells the death of marriage and the ascendancy of the pre-nuptial agreement are overstated when regard is had to the rarefied financial climate of these cases and the traditional opposition of this jurisdiction to the concept of such agreements irrevocably displacing the tried and tested s.25 criteria.

Bibliography

Bailey-Harris, R., Lambert v Lambert - Towards the recognition of marriage as a partnership of equals, (2003) CFLQ 417

Bird, R., Miller v Miller, [2005] Fam Law 874

Cooke, E., Playing Parlour Games: income provision after divorce, [2004] Fam Law 906

Cooke, E., White v White, A new yardstick for the marriage partnership, (2001) CFLQ 81

Cretney, S., Masson, J. & Bailey-Harris, R., Principles of Family Law, (7th Ed., 2003)

Cretney, S., Community of Property Imposed by Judicial Decision, (2003) LQR 349

Douglas, G., How parents cope financially on separation and divorce - implications for the future of ancillary relief, (2001) CFLQ 67

Eekelaar, J., Shared Income after Divorce: A Step too Far, 2005) LQR 1

Hale, B., Pearl, D., Cooke, E. & Bates, P., The Family, Law and Society: Cases and Materials, (5th Ed., 2002)

Hayward-Smith, R. & Newton, C., Jacksons Matrimonial Finance & Taxation, (7th Ed., 2002)

Herring, J., Family Law, (2nd Ed., 2004)

Higgins, S., Inheritance and Financial Claims on Divorce, (2003) PCB 247

Jenkins, C., Have you heard the one about the footballer and the accountant?, (2005) PCB 47


Footnotes

[1] The Times 25 May 2006, 2006 WL 133360

[2] [2002] 2 FLR 981

[3] Cooke, E., White v White, A new yardstick for the marriage partnership, (2001) CFLQ 81 at p.85

[4] [2002] Fam 97

[5] [2003] Fam 103

[6] [2005] EWHC 1717 (Fam)

[7] [2005] EWCA Civ 984

[8] [2004] EWCA Civ 872


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