Managing Partner Katie McCann has provided her analysis of recent high-profile legal judgments affecting family law, as well as an overview of no-fault divorce and the challenges faced in handling UHNW complex assets.
Katie’s comments were published in Citywealth, 20 September, and can be read here.
Asked what was top-of-mind for family lawyers at present, Katie commented: “In a divorce context, “which” international jurisdiction is best is a key consideration. At the outset of the divorce, we will provide the individual with specialist and succinct cross jurisdictional advice in conjunction with recommended international lawyers to determine which country the individual should commence their divorce in. This element is significant as some jurisdictions may provide a more favourable outcome for the individual, so choosing the correct forum at the outset is crucial.
“In matrimonial cases dealing with UHNW individuals, the asset base is invariably complex and unique. When businesses are involved, for example, it can be difficult to value such asset bases, especially if the business involves offshore corporates, trust structures and worldwide assets. Luckily, we are experienced in all such elements and ensure that we can deliver current advice to the client, in conjunction with relevant experts. It is also usually necessary to build a team around a UHNW client from the outset, i.e., an accountant, a tax advisor, a corporate lawyer and so on, to ensure that all angles are covered and strategized for.
“Similarly, when complex trusts are involved, and the spouse without an interest argues that the trust is a financial resource to the other party and should be considered, it is extremely important that the family lawyer acting for the UHNW individual can provide them with expert advice in relation to this intricate area of law. We always act in conjunction with specialist trust counsel at the earliest opportunity when these circumstances. It is also vital to ensure the individual receives expert advice in respect of international elements, such as the UK’s departure from the EU and any impact this may have on the individual’s personal
and complex business assets.
“If a spouse has generated a significant amount of the income in the marriage in a standout or unusual way, family lawyers must also consider special contribution arguments. The definition of ‘needs and sharing’ and what constitutes as non-matrimonial property must also be considered thoroughly. These areas of law are complex and fast changing and our knowledge and awareness of the same is prime to ensure that we can assist the individual from all angles.
“Finally, when advising a UHNW individual in their divorce, it is important to ask whether there is a pre-nuptial agreement and to provide proficient advice on the effectiveness of the same. After the divorce has finalised and matrimonial finances settled, we would always sit with the client and discuss the importance of considering a nuptial agreement if they were to remarry in the future so that they can limit their exposure to another difficult divorce.”
Asked about what new pieces of case law are of particular interest, Katie replied:
H V W [2023] EWFC 120: Re Set Aside Applications
“In this case, HHJ Reardon KC considered cross-applications regarding a financial remedy order made in May 2021. In August 2022 an implementation order was made by the husband as he was unable to progress the order of 2021 due to the wife’s non-engagement.
“The case was then brought before HHJ Reardon as the wife had frustrated the implementation of the 2021 and 2022 orders due to her lack of engagement in the selling of the matrimonial properties. The husband therefore made an application under the Thwaite jurisdiction for a further lump sum as compensation, enforcement of the implementation order, a charging order over the family home or an order for sale and an application for committal for breach of the wife’s undertaking that she gave not to borrow against any of the rental properties pending transfer to the husband.
“The wife made a cross application to set aside the implementation order and to strike out H’s Thwaite application. A Thwaite application is essentially where the court has the inherent jurisdiction to make a fresh order where an order has not been carried out, but only where it would be inequitable not to do so.
“HHJ Reardon confirmed that the wife had acted to frustrate the implementation of the final order and rejecting the wife’s argument for extenuating circumstances to justify her conduct.
“The wife’s application to set aside the 2022 order was refused as it was found her reasons for non-attendance at the hearing were unsatisfactory and she had taken 8 months to make the set aside application.
“As for the husband’s applications, HHJ Reardon applied the Thwaite authority in the circumstances in that in the husband’s application, the wife had already accepted there must be an adjustment to the previous order.
“Mostyn J has in a recent case questioned authority of Thwaite, however in this case, HHJ Reardon confirmed that despite Mostyn J’s criticism, the outcome could only be achieved by applying the Thwaite jurisdiction therefore it was HHJ Reardon’s view was that the Thwaite jurisdiction was applicable in this case, setting a notable change in the implementation of the authority.”
UNGER & ANOR V UL-HASAN (DECEASED) & ANOR [2023] UKSC 22: Can a party continue to pursue a financial remedy order against a spouse who is deceased?
“This recent case considered whether a party can continue proceedings in the event of the other party dying prior to the conclusion of a divorce and financial remedy settlement. In this case, the husband died before conclusion of the wife’s financial remedy application.
“Despite Mostyn J considering the decision in Sugden v Sugden was incorrect, he applied this authority in this case, ruling that the wife’s claim for financial relief expired with the death of the husband. The wife appealed Mostyn J’s decision at the Supreme Court, and the appeal considered if the Matrimonial and Family Proceedings Act 1984 read with the Matrimonial Causes Act 1973 can only be exercised between living parties to a former marriage. Secondly, the case considered if a claim for financial relief under the 1984 Act is a cause of action which survives against the estate of a deceased spouse under section 1(1) of the Law Reform (Miscellaneous Provisions) Act 1934.
“Lord Stephens confirmed that it was in fact Barder v Caluori (1988) that applied in this case.
“It was decided that on the true construction of the 1984 Act, read with the 1973 Act, the rights to apply for financial relief are personal rights and obligations which end with the death of a party to the marriage and cannot be pursued against the deceased estate. Lord Stephen’s therefore dismissed the wife’s appeal.”
RA V KS (INTERIM ORDER FOR SALE) [2023] EWFC 102: Blurring the lines between family and civil law.
“In this very recent case, Recorder Allen KC concluded that in an application made under section 17 of the Married Women’s Property Act 1882, the court cannot order vacant possession of a property if the respondent has a legal and beneficial interest in the property.
“In this instance, the applicant would be left with no choice but to make an application under Trusts of Land and Appointment of Trustees Act 1996, blurring the lines between family law and civil law.”
Asked to reflect on the long-term changes brought about by the introduction of no-fault divorce, Katie commented: “It can be said that no-fault divorce has simplified the process for separating spouses. It is now simply a non-contentious ‘tick box’ procedure which the other party is to acknowledge. For the vast majority of people, this new procedure has taken some of the heat out of divorce and has worked well.
“However anecdotal, a number of clients in our own practice have been disappointed with this. Some feel that they have lost the opportunity to “have their say” at that early stage. They may have had friends or family who have been divorced using the old regime and so have been exposed to that process and expect the same.
“So the reviews, if practitioners are to be honest, are mixed. However, as the public gains a wider understanding of the benefits of no-fault divorce as it becomes more established over time, it can undoubtedly only be a very positive thing for divorcing couples, allowing them to focus on the main issues as opposed to the contents of the actual petition.”
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