When a court is asked to decide a matrimonial financial dispute between spouses or between a couple in a Civil Partnership, Section 25 of the Matrimonial Causes Act 1973 and Part 5 of Schedule 5 of the Civil Partnership Act 2004 regulate and determine the matters that the court has to take into account. We as specialist Family Law Solicitors apply the same considerations when we advised clients and then negotiate on their behalf – both in and out of court.
The first issue to be considered is the welfare of any minor (under 18) child of the family.
Section 25(2) and Part 5 then set out a number of factors (not in any order of preference) to which the individual facts of the case must be applied.
Of all of the factors listed “needs, obligations and responsibilities” has the most relevance in the majority of cases.
On the face of it “needs” tends to imply a necessity or even poverty and that, to a very large extent, was how the Family Courts viewed the situation right up to the late 1990s. However when faced with a series of cases involving extremely wealthy husbands (usually), a little lateral thinking was required and so the 2000s and 2010s saw a number of attempts to stretch the definition of “needs” as set out in the 1973 Act, to meet modern times.
“Needs, compensation and sharing” and “needs generously interpreted” became the basis for a number of high profile decisions as the court sought to reconcile the terms of an Act laid down some 44 years ago against the 21st Century.
On 12th May 2017 Mr Justice Mostyn rejected an appeal by a Husband against an Order by a Circuit Judge that he should pay his wife £4.25 million out of his £37 million fortune. The Husband sought to argue that the Circuit Judge had gone beyond a simple assessment of the Wife’s needs.
Mr Justice Mostyn took the opportunity to give guidance as to the matter of “needs”. He said:-
“So far as the “needs” principle is concerned, there is almost unbounded discretion. The main rule is that save in a situation of real hardship, the “needs” must be causally
related to the marriage………..the result seems to depend on the length of the Judge’s foot”.
Later in his Judgment he said:-
“Plainly “needs” does not mean needs. It is a term of art. Obviously, no one actually needs £25 million or £62 million or £224 million for accommodation and sustenance. The main drivers in the discretionary exercise are the scale of the payer’s wealth, the length of the marriage, the Applicant’s age and health and the standard of living, although the latter factor cannot be allowed to dominate the exercise”.
By his Judgment, Mr Justice Mostyn was clearly trying to clarify for the benefit of Judges, Practitioners and the parties themselves how the word “needs” should be interpreted in modern times. However by doing so, one cannot help but conclude that he has simply extended the already wide discretion that the courts have when determining matrimonial financial disputes, thus creating even more uncertainty.