Financial Remedies
June 2023

The Supreme Court considered whether, if a party to a divorce action dies prior to the action concluding, can the other party continue their claim. It confirmed that financial claims in divorce do not outlive the parties by dismissing the appeal brought by the wife to allow her to pursue a claim against the estate of the husband.

Background

In 2012 Mr Hasan obtained a divorce from Mrs Hasan in Pakistan. Mrs Hasan then applied for financial relief under part III of the Matrimonial and Family Proceedings Act 1984 (“the 1984 Act”). The purpose of Part III is to alleviate the consequences, where no, or less than adequate financial relief has been made by a foreign court in a situation where the parties have close connections with England. The husband unfortunately died before the wife’s claim could be adjudicated.

Mostyn J considered that the case of Sugden v Sugden [1957] P 120 was binding and therefore he was obliged to find that the Wife’s claim for financial relief expired with the death of the Husband even though he considered the decision in Sugden wrong.

The High Court, acknowledged that, despite the inherent unfairness which may arise as the result of a divorce action not being permitted to continue post the death of one party, no further action could be taken. Mostyn J observations show a defect in the law. Mostyn J granted an application to be made for leave to appeal directly from the High Court to the Supreme Court, which was granted.

The appeal

The first issue in the appeal was whether Matrimonial and Family Proceedings Act 1984 (“the 1984 Act”) read with the Matrimonial Causes Act 1973 (“the 1973 Act”), can only be exercised as between living parties to a former marriage.

The second issue is whether 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 (“the 1934 Act”).

Judgment

Lord Stephens stated that the proper approach was set out in Barder v Caluori [1988] AC 20.

In answering the question, the first matter was to identify the nature of the further proceedings sought to be taken and the second matter is the true construction of the relevant statutory provisions. The third matter is the applicability of section 1(1) of [the 1934 Act].”

In this appeal the nature of the further proceedings is the continuation of the claim for financial relief. The relevant statutory provisions are contained in the 1984 Act and the 1973 Act and consideration was given to whether on their true construction, the statutory provisions create personal rights and obligations which can only be adjudicated between living parties.

If, on their true construction, the rights, and obligations under the 1984 and 1973 Acts do not end with the death of a party to the marriage, then the answer to the 1934 Act cause of action issue would be relatively straightforward. A party to a marriage would be entitled to demand an outcome as of right. Judicial decisions, insofar as they suggested that a claim for financial relief was not a cause of action within the meaning of the 1934 Act, cannot now be supported.

Lord Stephens concluded 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. This is a long-established legal understanding. If a purpose of the statutes was to depart from that settled understanding, one would have expected there to be clear words to that effect.

“It has long been assumed, and decided by lower courts, that a claim for what used to be known as ‘ancillary relief’ (financial provision on divorce etc) would fall away on the death of one of the spouses”.

Dismissing the appeal, Lord Stephens considered that the appellant’s submission that a party to a marriage can continue a claim despite the death of the other party would be a major reform, involving radical change to long-established principles, and involve questions of policy including its impact on the law of succession and potentially on the law of insolvency. Reform is for Parliament, not the courts.

The issue as to whether a claim for financial relief under the 1984 Act amounted to a cause of action which survived against the estate of a deceased spouse under section 1(1) of the 1934 Act did not arise for determination.

The judgment in financial remedy proceedings concerned the differences that accompany a draft judgment handed down respectively in the KBD, the Family Division, and the Crown Court. Mostyn J called for harmonisation of the rules.

Background

Mostyn J directed for a copy of his judgement to be sent to each of the Civil Procedure Rule Committee, the Family Procedure Rule Committee, and the Criminal Procedure Rule Committee with a request that they seek to harmonise the rules on embargoed draft judgments.

The case involved a wife’s application for financial remedies which was made 21 years ago. There were several extreme delays to the case, including an 8-week trial in the Crown Court in November 2010, in which the husband was found guilty of laundering money. The CPS then commenced confiscation proceedings under the Proceeds of Crime Act 2002 (PoCA) against the husband.

The Husband was then served a document titled the ‘Findings Made Following Confiscation Proceedings’ by the Crown Court. The document constituted a draft judgment. The husband’s position statement to Mostyn J included several things about the contents of the draft judgments and therefore the husband breached the prohibition and may be in contempt of court. An issue, therefore, was whether there was a prohibition on any party distributing the contents of the draft judgment to anyone. Nothing was said by the judge, nor did the draft judgment include a rubric suggesting that there was a prohibition on any party disseminating the contents of the draft judgment.

Mostyn J considered CPR PD 40E, the procedural rules for rubrics on embargoed judgments in the King’s Bench Division, which provides that it is a contempt of court to disclose to any other person or use in the public domain a draft judgment and to take action in response to a draft judgment before the judgment is handed down. In contrast, in the Family Division and in the Family Court there is no equivalent.

Mostyn J stated that the judgment template generates, as a default, a draft family judgment which bears the following rubric:   

"IN CONFIDENCE

This is a draft of the judgment to be handed down on █████ at █████ in Court No █████ . It is confidential to Counsel and Solicitors, but the substance may be communicated to clients not more than █████ before the giving of judgment. The official version of the judgment will be available from the Courts Recording and Transcription Unit of the Royal Courts of Justice once it has been approved by the judge."

There is nothing in the Family Procedure Rules or in the family rubric which explicitly says that breach of this non-disclosure requirement is a contempt of court. Such an equivalent also does not exist in the Crown Court.

“It is unacceptable that someone would almost certainly be in contempt of court if she discloses a draft KBD judgment to a journalist; might well not be if she discloses a draft Family Division judgment; but in all likelihood would not be if she discloses a draft criminal judgment. This is an unacceptable example of arbitrariness.”

Mostyn J therefore, directed for a copy of his judgement to be sent to each of the Civil Procedure Rule Committee, the Family Procedure Rule Committee, and the Criminal Procedure Rule Committee.

Recorder Allen KC held that where an application is made under s17 of the Married Women's Property Act 1882, the court cannot order vacant possession if the respondent has a legal and beneficial interest in the property.

Background:

The wife made an application, for an interim order for sale of a property known as the Barn. The application was made under section 17 of the Married Women's Property Act 1882.

Recorder Allen KC considered that where an application for an interim order for sale made under MWPA 1882 s17 seeks vacant possession of a dwelling house. The court cannot order vacant possession where s33 (3) (d), Family Law Act 1996 applies.

Recorder Allen KC stated that if the respondent has a legal and beneficial interest in the property then, by virtue of s33(3)(d), the right to occupy may be prohibited, suspended, or restricted. However, the court does not have the power to extinguish permanently or irrevocably these rights. The position is different if the respondent’s rights of occupation derive solely from home rights arising from the marriage (where s33(3)(e) applies).

It is for this reason that Cobb J states in WS v HS (sale of matrimonial home) [2018] at [53] (iv) “It is important for the applicant for an order to assert his/her case specifically and clearly as to the respondent's 'rights'.”

In such circumstances if the respondent has a legal and beneficial interest in the property there is no choice but for the applicant to bring a TLATA 1996 application.