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Kara Swift
Kara Swift
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Miller and McFarlane: An Opportunity Missed?

Date:23 OCT 2006

By Andrew Meehan, Solicitor, Addleshaw Goddard.

After much anticipation, the judgment from the House of Lords concerning the appeals against the Court of Appeal decisions in McFarlane v McFarlane [2004] EWCA Civ 872, [2004] 2 FLR 893 and Miller v Miller [2005] EWCA Civ 984, [2006] 1 FLR 151 was handed down on 24 May 2006. The cases have been heralded in the press as pivotal decisions in the post-White [2000] 2 FLR 981 world. But, now that the dust has settled, how will the judgment affect future cases?

General approach
Fairness remains the ultimate objective and the court should try to give each party an equal start on the road to independent living. As set out in the Matrimonial Causes Act 1973 (MCA 1973), first consideration must be given to the welfare of any children of the family. The court must endeavour to meet the financial needs of the parties. It is recognised that in the vast majority of cases, needs cannot be met and the other strands of fairness are irrelevant to those cases. In the remaining bigger money cases, the courts will also consider the elements of compensation and sharing.

Departure from equality
However long or short the marriage, the court should apply the yardstick of equality to the matrimonial property/acquest. In a short marriage, the source of an asset may be a good reason for departing from equality. In a longer marriage, the court will need to take into account the list of considerations set out by Lord Nicholls before deciding what weight should be attached to assets which are not family assets or not generated by the joint efforts of the parties and the importance of the source of the assets will reduce over time.

Guidance as to the admissibility of evidence on conduct was given which will apply in all cases, namely, that it will only be relevant where it is obvious and gross and where the conduct is so marked that it would be inequitable to disregard it. Other conduct which does not pass the s 25(2)(g) of the MCA 1973 test should not be considered by the court. It is not open, therefore, to a party to use conduct as a defensive shield to their spouse arguing that there should be a departure from equality due to the length of the marriage. Similarly, the same test applies for contributions which must have been a contribution to the welfare of the family rather than to accumulated wealth.

Periodical payments
The judgment made clear that periodical payments are no longer restricted simply to meeting a party's needs and that they can now extend to providing elements of compensation and sharing. In addition, the judgment highlighted the unusual set of facts in McFarlane. There is a possibility that spouses with pre-existing orders for periodical payments may argue that they should receive increased periodical payments so that fairness is done to them too. The courts must consider the feasibility of a clean break, but must not order a clean break while at the same time sanctioning an outcome which is unfair.

Legitimate expectation
Legitimate expectation to life on a higher financial plane has not been elevated to a principle or yardstick; the standard of living should simply be examined as part of the statutory checklist.

Despite the efforts made by the House of Lords to give guidance on a number of issues, much of the judgment focuses on general principles rather than on specific instances in which courts should or should not depart from equality of division of assets and income. It will continue to be difficult to advise clients as to the way in which the jurisdiction of the courts will be exercised because the overarching requirement of fairness will remain a subjective concept and interpretations of the judgment will vary when applied to different facts.

See July [2006] Fam Law 566 for the full article including the key facts, summaries of the decisions at first instance and in the Court of Appeal and the House of Lords' guidance on a number of issues.

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