Thursday, December 27, 2012

Why do I need a Consent Order on Divorce?

One of the irritating things about getting divorced in England and Wales is that the divorce itself does not deal with the finances. For that you need a Consent Order.

A Consent Order:

1. Is the only legally binding route to deal with the division of finances on divorce.

2. Gives finality. It is difficult to overturn.

3. Is the only way to have a pension share.

4. Confirms what happens to all assets and debts in sole or joint names.

5. Deals with income claims - is there maintenance to be paid? Do you want the opportunity to make a claim in the future? Do you want the removal of a claim - known as a clean break.

6. Prevents your ex coming back for money in the future. A lottery winner last year who divorced decades earlier was ordered to make a lump sum payment to his ex wife.

7. Needs legal knowledge to ensure it is correct. I was called last week by a lady who had her own draft rejected 3 times by a judge and was ordered to get legal assistance to draft it. She said it was simple so she did not want to pay much. This lack of understanding will no doubt result in more rejections by a judge or a badly written Consent Order that does not cover all eventualities.

8. Is worth paying for if you have any assets now, expect any in the future and earn a living or expect to earn a living in the future.

Getting to the stage of agreeing what goes in a Consent Order is the hard part... Once you have an agreement make sure it is legally binding!

Wednesday, December 19, 2012

Certainty in Divorce payouts better than fairness?

Our current system for dividing the spoils upon divorce is the most uncertain of all. It is based upon an individual judge's view of what is fair. The judge has to take all factors of the case into account and apply the law based on individual facts. Consequently it is difficult to predict what will happen on an individual case by case basis.

The Law Commission is reviewing this and as reported in the Evening Standard  "divorce judges welcome "cookie cutter" share out plan".

"The aim would be to ensure greater consistency in judges’ decisions and give couples greater certainty about how much each will receive if they decide to split. The Law Commission, which is studying the idea for ministers as part of a wider overhaul of divorce legislation, also believes that the reform could reduce conflict and the cost of divorce cases by making people less likely to pursue unrealistic claims.

Critics of the system, which was introduced in Canada in 2008, claim that it leads to “cookie cutter” justice in which the size of divorce settlements becomes too fixed, rather than decided on the merits of each individual case."

There would be a formula which judges could depart from if necessary. Formula's are used in criminal cases and personal injury cases and they are used in family law cases in other countries. For example in Scotland spousal maintenance is only paid for three years. The formula is also used for child maintenance. Why not spousal maintenance and capital division? It could be related to the length of the marriage,the number of children and the relative earning capacity of the parties.

There would be an upper and lower limit which judges would work with them. Currently the upper and lower limit is what an individual judge considers is fair. The judge can be influenced by the manner in which a case is presented and the way in which the parties conduct themselves.

A formula would indeed reduce uncertainty and reduce meritorious claims.

In my experience more people are prepared to proceed to a Final Hearing since the law changed to remove costs orders in the majority of cases. It used to be that if you made an offer which the other party did not accept and which you bettered at court you would receive your costs if the offer had been outstanding for 28 days or more. The risk of paying both party's costs encouraged people to negotiate and settle sooner. Now more people are prepared to risk the costs of a final hearing given the fact that the outcome can be so different. People even proceed ignoring legal advice and potentially represent themselves.

I consider that a formula would indeed be of assistance and a curtailment to litigation.

Monday, December 10, 2012

Ex girlfriend loses Court of Appeal case for share of house

This case involved a  couple who separated in 2005.  The appeal was heard in October this year.Originally the boyfriend Stephen Mark Condappa (Stephen) had purchased a property in October 1986 with a previous girlfriend and he had bought out her share when their relationship ended..

He then began a relationship with another girlfriend and has a child with her. She lived at the property from 1989 to 1990. She claimed a beneficial interest and managed to have him removed from the property but did not succeed in her claim. He regained possession of his house in September 1992.

He knew the claimant Yvonne Slater (Yvonne) since they were teenagers. She was married and divorced and she had a council flat which Stephen moved into when he was excluded from his house.

Not having learnt his lesson Yvonne then moved into the property in 1994 with her daughter.

The couple then ran a computer business together. Yvonne never gave up her council tenancy, despite living full time at Steven's property. This was a key fact in the case. She lied to the council to retain the flat and filed a witness statement claiming it was her main residence and successfully defended a possession order.She also claimed she lived there in order to receive income support and housing benefit. This despite her running a company which was mainly trading in cash and never declared to the Inland Revenue.

Their relationship ended in January 2005 and she moved out of the property

The relationship broke down because Steven had a relationship with another woman which had been going on since 1999.

Yvonne admitted to her dishonesty but claimed that Stephen was also dishonest, having been unfaithful throughout the relationship and involved in the cash business..He also had his mother's property transferred to him to enable her to obtain legal aid.

 Yvonne was not represented at the hearing and expected the court to believe that Steven had promised her a 50% share of the property. He was the sole legal owner and she had no legal claim but was seeking a beneficial claim based on common intention.

The judge refused to believe her stating her claim was fanciful. He accepted that Steven was dishonest but her level of dishonesty was far worse he regarded her as "habitually dishonest".

Paragraph 65 of his judgement:

" I have also, of course had the opportunity of assessing both the Claimant and the Defendant whilst giving evidence and one thing which struck me about the Claimant was how she supposedly admitted her various deceits and perjuries and so on, but in so doing looked me straight in the eye without a flicker of regret, remorse or contrition about what she had done done or, indeed, of what she was still doing. In my view, she so-called came clean to this court but has not come clean to anybody else or any other agencies who, in fact, suffered a loss, and the reason she has done so to this court is because it suits her to do so to me but it does not suit her in respect of any other of these matters".

There was also an issue about potential forged letters from a previous employer to increase a personal injury claim of Yvonne's. The judge stated that her dishonesty did not mean she was lying about the agreed share in the property but it meant he had to be ultra-cautious about her evidence.

Yvonne had to establish an agreement which she had relied on to her detriment. She had not done so. Neither had she suffered the loss as her contribution of the cash from the computer company was used to supplement family life not meet mortgage payments and other expenses relating to the property.

In order to prove an interest in a property owned by one party the other party has to show that there was an agreement or a common decision, or a promise or some other such oral declaration that the property will although legally held in one party's sole name was held for the benefit of both beneficially.  This is a difficult hurdle to jump. Typically there will be no written agreement and a verbal agreement is down to the believability of the witnesses. Where both are dishonest and evidence is shown to prove their dishonesty against other parties and Government Agencies the claimant cannot expect the court to support such a claim.

The legal terminology is come to equity with clean hands.

It is wholly possible that what Yvonne was claiming was true. She stated that he offered her a share which the judge regarded as implausible however couples do act in implausible ways.  She also stated that he reiterated his promise in order to try to reignite the relationship once his adultery had been discovered. She failed because she was not a believable witness.

This case highlights how different cohabitation law is to matrimonial law. If they were married she would have had a claim of at least 50% of the property. The court could have disregarded any gain prior to the relationship and made an award based upon her need.

Unfortunately many people believe that if they cohabit they acquire common law rights. They do not.  This problem will become worse in the future as more people are choosing  to cohabit.