Ancillary Relief: Individualized Justice or Bright Line Rules? By

Orhun Hakan Yalincak © 2012. All Rights Reserved.
Ancillary Relief: Individualized Justice or Bright Line Rules?
By
Orhun Hakan Yalincak
Abstract
This essay examines the contention that ancillary relief involves too
much judicial discretion, lacks coherence and does not provide legal
certainty for litigants. It discusses whether, with a view to reforming
the current law, the Law Commission should comprehensively review
the principles of ancillary relief rather than specifically focus on the
enforceability of prenuptial agreements.
I.
Introduction
Ancillary relief proceedings are governed by section 25(2)(a)-(h) of the Matrimonial
Causes Act 1973 (MCA). On the basis of the eight non-hierarchical list of factors enumerated
under this section and its judicially created objective of ‘fairness,’1 Courts are given broad
discretion in the context of ancillary relief claims to (re)distribute a family’s wealth on
separation or divorce to produce a ‘bespoke solution for the infinite variety of individual
cases.’2 On the one hand, the discretion inherent in this approach is permitted to provide
individualized justice because rules have the potential to delimit entitlement and in the
process frustrate the need for flexible responses to individualized circumstances. 3 On the
other hand, this system of discretion has been criticized as lacking, inter alia, ‘theoretical
coherence,’ ‘a principled basis,’ and ‘predictability’ in practice.4
Building on this introduction, Part II will outline the statutory framework, as well as
discuss the role of discretion, the concept of fairness, as well as the attendant theoretical,
principled, practical problems surrounding ancillary relief and examine the impact of these
1
Piglowska v Piglowska [1999] 2 FLR 763, affirmed in White v White [2001] 1 A.C. 596.
Dart v Dart [1996] 2 FLR.286, 295; see also A. Diduck, ‘Ancillary Relief: Complicating the Search for
Principle’ (2011) 38(2) J Law & Soc 272-300.
3
C. Sustein, ‘Problems with Rules’ (1995) 83 Cal.L.Rev 953, 962; see also J. Dewar, ‘The Normal Chaos of
Family Law’ (1998) 61(4) MLR 467-485.
4
E. Cooke, ‘Miller/McFarlane: Law In Search of Discrimination’ (2006) 19 CFLQ 98, 99.
2
1
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issues on run-of-the-mill cases. Part III will discuss the arguments for and against a
comprehensive review of ancillary relief and discuss the impact of the Law Commission’s
specific focus on the enforceability of prenuptial agreements. This essay will conclude that
while the LC’s specific focus on enforceability of prenuptial agreements does not solve the
doctrinal problems, it was the correct start, as the reform of either or both are not mutually
exclusive.
II.
Ancillary Relief
A. Statutory Framework
According to Cretney ever since Wachtel v Wachtel5 it has been understood that
reallocation of matrimonial property can best be achieved by judges exercising a wide
discretion.6 Section 25, however, makes no a priori declarations of the financial rights and
obligations arising from marriage, but leaves their content to be defined only upon breach.7
Moreover, section 25(2) leaves the weight to be accorded each factor dependent on the
particular facts of each case where even unlisted factors can be taken into account by the
courts provided that they are relevant.8 The Court’s duty in this regard is phrased in the
classic discretionary formulae of consideration of ‘all the circumstances of the case.’ 9 The
first consideration is identified as children of the family,10 thus constituting the closest to a
principle articulated by the statute in relation to ancillary relief. 11 Beyond that, however, the
statute contents itself with only one duty for the court, namely, to consider the
appropriateness of affecting a clean break between the parties. 12 However, earlier authorities
have indicated that this objective should not be elevated to the status of a principle and that
5
[1973] Fam 72.
S.M. Cretney, ‘Trusting the Judges: Money after Divorce’ (2000) C.L.P. 286; see also G Davis, et al.,
‘Ancillary Relief Outcomes’ (2000) 12 CFLQ 43, 62.
7
R Bailey-Harris, ‘The Paradoxes of Principle and Pragmatism: Ancillary Relief in England and Wales’ (2005)
19 I.J.L.F 229-241.
8
id.; See also Co v Co [2005] EWHC.287.
9
Ibid. (Bailey-Harris)
10
id.; see also s 25(1) MCA.
11
Ib.id. (Bailey-Harris).
12
id; and s 25(A) MCA.
6
2
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there is no presumption in favour of a clean break.13 Consequently, section 25 provides ‘no
starting point, no presumption, no goal, no hint’ as to what a fair division of assets would be
upon the dissolution of a marriage.’14 Section 25 read together thus provides no coherent
model or philosophy of allocation to guide the court’s discretion.15
B. Discretion and the Concept of Fairness
1.
Pre-White ‘Reasonable Requirements’
It has been argued that there are at least three different and potentially conflicting
models of resource allocation ranging from a needs-based model, to a compensation model,
to a clean break model.16 In Dart v Dart,17 the leading ‘big money’ case before White, the
Court of Appeal stated “the scheme of [the MCA] must…be set in the wider perspective of
history…In this jurisdiction rights of property are not invaded or reduced by statutory powers
save for specific and confined purposes.”18 This meant that non-propertied wives were
required to demonstrate extraordinary contributions before they were thought, in fairness, to
deserve a share in it.19 Instead, the breadwinner/dependent ideology prevailed in which so
long as her ‘reasonable requirements’ were met, fairness dictated that she had no further
claim to assets, no matter how extensive they were.20
2.
White v White and the ‘Yardstick of Equality’
In White v White, the House of Lords shunned the ‘reasonable requirements’
approach in favour of a new principle of universal application: non-discrimination between
the husband and wife and, further, that fair ancillary relief orders must be measured by a
13
id.; see also Clutton [1991] IFLR.245; SJR v DWJ[1999] 2.FLR.181; Phippen v Palmers [2002] 2.FLR.408.
E Cooke, ‘White v White a New Yardstick for the Marriage Partnership’ [2001] CFLQ 81.
15
n.4 above 98; and A. Diduck, ‘Fairness and Justice For All? The House of Lords in White v White’
(2001)9.FLS.173-183.
16
id.
17
n.2, above, 295.
18
n.15, above, 175.
19
id.
20
id.
14
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‘yardstick of equality.’21 However, while the decision clarified the law to be applied in
applications under section 25, it did little to clarify the uncertainty of judicial discretion. 22 It
recognised, inter alia, that fairness was a historically and socially contingent concept; it could
mean different things to different people at different times and transforming it into a
contemporaneous legal concept required, at a minimum, some direction.23 According to
Diduck, since that direction was not provided by the legislature, the Court took it upon itself
to provide the necessary leadership.24 Cooke has argued that while this decision marked a
sea-change in the law of ancillary relief, it also left the law of ancillary relief in such turmoil
that it has become almost impossible to predict what the courts will do in certain complex
‘big money’ cases and, potentially, if the trickledown effect has merit, in many of the more
run-of-the-mill cases.25
3.
Miller/McFarlane
While White removed gender bias, the case law following White introduced
significant uncertainties culminating in the decision in Miller/McFarlane.26 Why? In short,
the answer lies in the assumptions made in White, which include, without limitation, (1)
where assets exceed need, the importance to set a value upon the parties’ contributions; (2)
domestic contributions can be valued; and (3) domestic contributions will generally equal that
of the financial contributions.27 As observed by Cooke, both the partnership approach and
valuation-based model were at work in White, which purports to value contributions equally
in order to share and/or make restitution; however, it then introduces unrealistic principles of
valuation in order to jump to a conclusion which follows from a partnership/equal sharing
21
n.4, above, 98-99.
id.
23
id.
24
n.15 above 175.
25
n.4 above 99.
26
id.; [2006]1 FLR1186.
27
id.
22
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model.28 This approach thus mingles theories without discrimination, attaching reasoning of
one conclusion to another and leading to a superficial principle that cannot carry the weight it
is tasked with.29 This paucity of theoretical coherence, while buttressed with the intuitive
attractiveness of equality, does not work when it meets competing values.30 For example, as
observed by Cooke, if the yardstick derives from a valuation-based approach then of course
stellar contributions, lazy spouses and other conundrums must make a difference. 31 On the
other hand, if it reflects a partnership approach, then similar to a community system, it cannot
do so.32
4.
The Gordian Knot
According to Cooke, the reasoning adopted in White made it inevitable that White
would not be the last word.33 Six years later, in Miller/McFarlane,34 Lord Nicholls not only
re-affirmed the need for courts to be guided by principle rather than a bespoke interpretation
of fairness, but to articulate those ‘applicable, if unspoken principles.’35 Lord Nicholls
reiterated that fairness is grounded in social and moral values that go beyond the traditional
confines of ‘family’ and the words in the statute.36 Firstly, as observed by Diduck, fairness
requires an equality by which like cases must be treated the same.37 Secondly, it meant that
the respective parties’ needs must be met.38 Thirdly and fourthly, it meant that it included
elements of compensation and expectation of sharing, measured by the yardstick of
equality.39 Thus, Baroness Hale and Lord Nicholls reset the boundaries of judicial discretion
so as to take into account more than the ‘infinite variety’ of familial financial circumstances,
28
id. 99-100.
id.
30
id.
31
id.
32
id.
33
n.4, above, 98-102.
34
n.26 above.
35
Diduck, n.2 above, 277-278.
36
id.
37
id.
38
id.
39
id.
29
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and to include the social context of those circumstances and universal and democratic norms
by which to assess them.40 However, as argued by Cooke, while the judgments in
Miller/McFarlane resolved a number of important issues -- in particular the role of conduct,
‘legitimate expectation’, and periodical payments it failed to set a principled rational for the
yardstick of equality.41 This result left open mutually competing questions as to whether the
splitting of assets equally is to value, reimburse and compensate; whether needs are to be met
before equal sharing; whether the rational for this exercise is simply the fact of marriage per
se; or, is it due to interdependence; is greater weight to be placed on a longer marriages and,
if so, why and how?42 Moreover, it left open a host of subsidiary issues – contributions, short
marriages, and non-matrimonial property.43 Consequently, Cooke argues that in the absence
of a legislative knife to cut the current Gordian Knot, in the form of an over-arching
principle, such a choice will have to be made by the courts, since lawyers will not be able to
fulfil their predictive role.44 However, this gives rise to an important question: how important
is this need for an overarching principle in the majority of cases?
C. Run-of-the Mill Cases
1. Need is Decisive in Most Cases
As argued by Cooke, it is clear that despite the huge number of factors mentioned in
section 25, the one to which overriding importance is attached for practical reasons is section
25(2)(b) and the meeting of needs.45 In other words, where the assets of the parties are only
sufficient to meet needs then that is all that the courts will do and indeed this is all that can be
expected through negotiations.46
40
id.
n.4 above, 98-102.
42
id.
43
id.
44
id.
45
id. 98
46
id.; see also LCCP 198, para 2.35 (noting ‘in most families there is barely enough–often not enough–to meet
everyone’s needs after divorce’)
41
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While this comment was about the pre-White situation of the law of ancillary relief, as
argued by Hitchings, it reflects the fact that the principles developed in White and its progeny
have superficial impact on most run-of-the-mill cases for practical reasons.47 In other words,
only where there is more than enough to meet the needs of the parties is a further principle or
rule required to guide or direct the parties on what to do with the surplus because needs does
not constitute a ceiling.48
2. Trickle Down Effect?
Cooke has argued that the number of issues left open in the decisions in White and
Miller/McFarlane would normally be issues for academic debate, confined to issues
involving the very rich, were it not for the fact that decisions in ‘big money’ cases trickle
down to affect the average case.49 However, as suggested by Hitchings in her study, the only
observable trickle-down effect of the sharing principle has been witnessed in practitioners
appearing to be more willing to consider on-going commitments between the parties, for
example, through Mesher and periodical payments orders.50 This leads to the conclusion that
everyday divorces remain relatively static: fairness is dominated by needs and practicality;
pragmatism trumps the doctrinal concerns.51
D. Community Property
As noted by Miles, Charman v Charman (No 4)52 is the most significant case in
ancillary relief since Miller/McFarlane.53 This decision is significant in several respects.
Firstly, it supports Eekelaar’s argument that the reform of ancillary relief is along the
47
E. Hitchings, ‘The Impact of Recent Ancillary Relief Jurisprudence in the Everyday Ancillary Relief Case’
[2010] CFLQ 93.
48
n.4, above, 106.
49
id. 101.
50
n.47, above, 99.
51
id. 106..
52
[2007] EWCA.Civ.503; [2007] 1 FLR 1246.
53
J. Miles, ‘Charman v Charman (No 4)–Making Sense of Need, Compensation and Equal Sharing After
Miller/McFarlane’ (2008) 20(3) CFLQ 378-394.
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trajectory of ‘sharing’ in lieu of the vague ‘yardstick of equality.’54 Secondly, as observed by
Barlow, it presents one potential response to the judgments in Miller/McFarlane.55 Thirdly, it
attempted to cut through the undergrowth of conflicting judgments in the House of Lords,56
and to provide clearer guidance on various aspects of the equal sharing principle.57 In
Charman the Court recognized that the mood had clearly shifted in favour of treating equal
sharing as a starting point, albeit it fell short of adopting it as the required starting point. 58 In
essence, whatever inhibitions Lord Nicholls felt in White about adopting a starting point
unsanctioned by Parliament was abandoned.59 This decision also solved another issue in the
wake of White and Miller/McFarlane: what property is prima facie to be shared equally?60
The Court held, more consonant with the approach of Lord Nicholls than with that of
Baroness Hale: save for two possible exceptions, all property belonging to either spouse,
whenever and however acquired, falls within the equal sharing pool.61 However, the
Charman decision kept in place the role of discretion by permitting departure on various
grounds, including without limitation, characterisation of the assets.62
III.
The Clamour for Comprehensive Review
A. Arguments in Favour
As observed by Miles, the clamour for legislative intervention has been considerable
and the judgment in Charman closed with a postscript on reform.63 The Court highlighted
several non-exhaustive factors fuelling demand in support of reform: (1) ‘big money’ cases
and the post-White generosity to wives; (2) globalisation, the increasing number of marriages
54
J. Eekelaar, 'Back to basics and Forward into the Unknown' [2001] Fam.Law 30, 32.
A. Barlow, ‘Community of Property–the Logical Response to Miller and McFarlane?’ (2007) 39 BLJ 19, 2122
56
n. 4 above, 98, 106 (comparing the judgments of Lord Nicholls and Baroness Hale).
57
n.53, above, 381.
58
id.
59
id.
60
id.
61
id.
62
id.
63
id. 387.
55
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with a foreign element, often including prenuptial agreements, which would be prima facie
binding under the law of that other jurisdiction, but which cannot be enforced by English
courts applying the law of the forum;64 (3) the interest in achieving harmonisation if not at the
Community level, at least at the level of private international law;65 and (4) the dissatisfaction
at the uncertainty, unpredictability and therefore the purported costs generated by
Miller/McFarlane.66 Notwithstanding these long standing concerns, however, the LC’s Tenth
Programme of Reform, declined to take on a project on ancillary relief in its entirety. 67 As
articulated by Dr. Sanders, the LC’s focus on the enforceability of prenuptial agreements,
despite such agreements having been previously characterized as contrary to public policy,68
was not wrong because the current state of the law vis-à-vis prenuptial agreements is not
sustainable. In other words, since the law recognizes the autonomy of a married couple on
how to go about their marriage, then it is not inapposite for couples to agree on how to divide
their property upon divorce.69
B. Arguments Against
As observed by Miles, the arguments against a comprehensive review of the
principles of ancillary relief included, inter alia, the increasingly politicised and controversial
nature of issues relating to marriage and civil partnerships; the lack of contemporary, large
scale empirical research into the operation of the current law; and the resources-intensive
nature of such a project.70
64
MacLead v MacLead [2008] UKPC 64; see also Dr. A Sanders, ‘Private Autonomy and Marital Property
Agreements’ (2010) 59 ICLQ 584; Cf. Scherpe, ‘Some Comparative Observations on Prenuptial Agreements’
[2007] IFL 18.
65
n.53, above, 392-394; see also Randmacher v Granatino [2009] EWCA Civ 659, para 29;[2010] UKSC 42
(holding prenuptial agreements should be “give[n] effect…that is freely entered into by each … unless in the
circumstances prevailing it would not be fair to hold the parties to their agreements.” para 75.)
66
Ibid. (Miles).
67
Ibid. (Miles).
68
Hyman v Hyman [1929] AC 601.
69
n.64 (Dr. Sanders); see also J Bray, ‘Prenuptial Agreements Under Scrutiny’ (2009) Denning LJ 131,137; and
K v K (Ancillary Relief: Prenuptial Agreements) [2003] 1 FLR.120; M v M (Prenuptial Agreements)[2002] 1
FLR 654.
70
n.53, above, 392-394.
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C. Did the LC Err by Specifically Focusing on the Enforceability of Prenuptial
Agreements?
The short answer is no. However, as observed by Miles, this focus was more likely to
attract a greater consensus of opinion.71 Nonetheless, as suggested by Miles, this narrow field
of inquiry is capable of mitigating some of the deficiencies identified in the current law.72
These include, inter alia, enabling the parties to achieve greater certainty themselves;
protecting one party against an exorbitant award; and could fit nicely into the current
substantive law inasmuch as it could provide the surest guide as to whether the parties
consider themselves ‘financially independent’ and their assets ‘unilateral’ and thus avoid
some of the problems arising from White and Miller/McFarlane.73
IV.
Conclusion
Given the lack any definitive evidence that the big money decisions have ‘trickled
down’ or impacted the outcome of the majority of cases, the individualized justice that is
provided on the facts of each case should not be shunned in favour of bright line rules,
objectives or rigid principles to straightjacket Courts to reach similar results in each case. 74
Therefore, while ancillary relief involves too much discretion, as argued by Dewar, the
present system is not a discretionary gloop; neither is it unworkable. More importantly, the
review and potential reform of prenuptial agreements or ancillary relief (to add or clarify
objectives) are not mutually exclusive. In point of fact, as observed by Cooke, the LC’s
project on marital property has now been extended to include two further topics: (1) needs
after divorce; and (2) the definition of matrimonial property.75
71
id.
id.
73
id.
74
For discussion of a system (Scotland) where principles are enshrined in legislation, see Davis, et al, n.6 above.
75
E. Cooke, ‘Pre-nups and Beyond’ (2012) (found at http://www.legalweek.com/legalweek/news/1937102/lawyers-enforceable-pre-nups-law-commission-launches-consultation, last accessed 23
Feb.2012)
72
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References
Table of Cases
1. Charman v Charman (No.4) [2007] EWCA Civ 503; [2007] 1 FLR 1246.
2. Clutton [1991] 1 FLR 245.
3. Co v Co [2005] EWHC 287.
4. Dart v Dart [1996] 2 FLR 286.
5. Hyman v Hyman [1929] AC 601.
6. K v K (Ancillary Relief: Prenuptial Agreements) [2003] 1 FLR 120.
7. M v M (Prenuptial Agreements) [2002] 1 FLR 654.
8. MacLead v MacLead [2008] UKPC 64.
9. Miller v Miller, McFarlane v McFarlane [2006] 1 FLR 1186.
10. Phippen v Palmers [2002] 2 FLR 408.
11. Piglowska v Piglowska [1999] 2 FLR 763.
12. Radmacher v Garantino [2009] EWCA Civ. 659; [2010] UKSC 42.
13. SJR v DWJ [1999] 2 FLR 181.
14. Wachtel v Wachtel [1997] Fam.72.
15. White v White [2001] 1 AC 596.
Statutes
Matrimonial Causes Act 1973.
Academic Sources
Journal Articles
1.
Bailey-Harris, R., ‘The Paradoxes of Principle and Pragmatism: Ancillary Relief in
England and Wales’ (2005) 19 IJLF 229-241.
2.
Barlow, A., ‘Community of Property–the Logical Response to Miller and
McFarlane?’ (2007) 39 BLJ 19.
11
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3.
Bray, J., ‘Prenuptial Agreements Under Scrutiny’ (2009) Denning LJ 131.
4.
Cooke, E., ‘Miller/McFarlane: Law In Search of Discrimination’ (2006) 19 CFLQ 98.
5.
Cooke, E., ‘White v White a New Yardstick for the Marriage Partnership’ [2001]
CFLQ 81.
6.
Cretney, S.M., ‘Trusting the Judges: Money after Divorce’ (2000) CLP 286.
7.
Davis, G., et al., ‘Ancillary Relief Outcomes’ (2000) 12 CFLQ 43.
8.
Dewar, J., ‘The Normal Chaos of Family Law’ (1998) 61(4) MLR.467-485.
9.
Diduck, A., ‘Ancillary Relief: Complicating the Search for Principle’ (2011) 38(2) J
Law & Soc 272-300.
10.
Diduck, A., ‘Fairness and Justice For All? The House of Lords in White v White’
(2001) 9 FLS173-183.
11.
Eekelaar, J., 'Back to basics and Forward into the Unknown' [2001] Fam.Law 30.
12.
Hitchings, E., ‘The Impact of Recent Ancillary Relief Jurisprudence in the Everyday
Ancillary Relief Case’ [2010] CFLQ 93.
13.
Miles, J., ‘Charman v Charman (No 4)–Making Sense of Need, Compensation and
Equal Sharing After Miller/McFarlane’ (2008) 20(3) CFLQ 378-394.
14.
Dr. A Sanders, ‘Private Autonomy and Marital Property Agreements’ (2010) 59
ICLQ 584.
15.
Scherpe, J.M., ‘Some Comparative Observations on Prenuptial Agreements’ [2007]
IFL 18.
16.
Sustein, C., ‘Problems with Rules’ (1995) 83 Cal.L.Rev 953.
Other Sources
1.
(found
E. Cooke, ‘Pre-nups and Beyond: What are the Law Commission up to now?’ (2012)
at
http://www.legalweek.com/legal-week/news/1937102/lawyers-enforceable-pre-
nups-law-commission-launches-consultation, last accessed, 23 Feb. 2012)
12