LW381 Exam Questions

							                             University of Brighton
                               Business School




                        LLB (Law with Business)




                 Families, the Law and Business module
                                 LW381


                        SAMPLE EXAM PAPER




Instructions to candidates

Time allowed: 2 hours
This paper is not divided into any parts.

Students are expected to answer ANY 3 out of the 5 questions listed. Student
must answer all parts of any question they chose.

Allowable material: students may take CLEAN copies of relevant statutes into
the exam with them. Students may not take into the exam their copy of the
case history handed out in advance: a clean copy of the case history is
contained within this exam paper.
LW381 Exam Questions May 2010

1. Chez and Ash have been married for four years. Chez is a highly
regarded TV presenter and Ash is a successful day time TV chef. Chez has a
good reliable well paid contracts and a good income.

Since Ash married Chez, he has stopped work all together and told Chez it is
her responsibility to earn the money. Ash who also used to cook all the meals
the couple ate at home, including a strict calorie controlled diet for Chez, now
insists on buying in high fat ready-meals. He refuses to cook the special
meals Chez needs to maintain a consistent body weight, essential for
appearing on the TV and tells Chez to join the gym.

Ash had promised to help around the house and take care of the household
finances when he gave up work. He does nothing but spend money
unnecessarily, pay bills late and is very messy. He employs a cleaning lady
to take care of all the domestic work as he finds it tedious. Although the house
is cleaned once a week this is not enough to make the couples living
environment acceptable to Chez as it is permanently untidy. Chez has a
demanding work schedule and finds it difficult to relax at home when the
house is messy. On one occasion Chez became so angry she threw some of
Ash’s possessions out of the house as she tidied up. Her doctor has recently
prescribed mild sedatives for anxiety and stress, which he says has been
exacerbated by Ash’s behaviour.

Chez also suspects Ash has been having an affair. He has made several
suspicious remarks to her lately, she has found lipstick on his shirt and he has
taken to staying out very late two nights a week. In addition to all the other
changes Chez has had to manage, she does not find this change in Ash’s
behaviour easy to live with as he is moody when he returns and it has started
to affect how she feels about him.

For the last four months Chez has taken to sleeping in the spare room and
making her own meals according to her diet plan and tries not to engage in
conversation with Ash.
Chez seeks your advice on whether she has grounds for divorce.

                                                 (25 marks)

BRONTIE INSERT YOUR QUESTIONS HERE AS 2 AND 3

4. Baroness Ruth Deech has suggested the message from the divorce courts
is that even a short marriage to a very wealthy man is an alternative career to
one in the workforce. Discuss whether this is an accurate characterisation,
and whether there are any steps a wealthy spouse may take to protect his
assets from claims for ancillary relief.

                                                 (25 marks)
5. When Jake and Davina divorced in January 2009 they reached a
settlement, embodied in a Consent Order approved by the court, which
provided as follows:

      The family home valued at £250K (mortgage free) was to be
       transferred to Davina
      Jake to retain his construction business valued at £250K and his
       pension fund valued at £50K
      Jake was to pay Davina spousal maintenance of £500 per month until
       both children left school, with a clean break thereafter
      Jake was to pay Davina child maintenance of £250 per child per month
       for Henry (aged 5) and Edward (aged 8), both of whom live with Davina

At the time the Order was made Jake’s business provided an income of
£60,000 pa and Davina worked part-time earning £10K pa. Jake planned to
rent a flat until he had built up some savings for a deposit.

In July 2009, following some months of lack of work due to the recession,
Jake’s business folded and its assets were sold to pay off debts. The only
work Jake could find was as a casual building labourer netting around £1500
per month. Meanwhile Davina’s lawyer boyfriend has moved in with her.

Jake now feels the settlement reached is very unfair to him and in any event
he can no longer afford to pay the maintenance. In October 2009 he seeks
your advice as to whether he can change:

(a) the capital division

(b) the maintenance obligations.


                                               (25 marks)
Suggest solutions

1.    s3(1) MCA 197 provides that a petition for divorce can only be entered after
one year of marriage. Chez satisfies this ground as married three years.

S1(1) MCA 1973 states the only ground for divorce is the irretrievable breakdown of
the marriage. Irretrievable breakdown can be proved by establishing one of five facts
under s1(2) ie adultery, behaviour, desertion, two years separation with consent or 5
years separation.

Chez will need to actually prove that the marriage has irretrievably broken down by
alleging one of the grounds Buffery v Buffery [1998] 2 FLR 365. Reality is such that
the special procedure involves no testing of evidence.

First part of the question focuses on Ash’s behaviour and candidates will need to
isolate the relevant behaviours from the facts and apply the tests below using
appropriate case law. Chez will need to substantiate that this is either a course of
conduct or omissions that it is not reasonable to live with. The list of conduct
applicable is wide and supported by case law (also supported by the Law Com and
Herring).

 Behaviour s1(2)(b) MCA 1973
   Petitioner must prove Respondent has behaved in such a way that P cannot
     reasonably be expected to live with R.
   Ash v Ash [1972] Fam. 135 Can this petitioner with his/her character and
     personality with his/her faults and other attributes, good and bad and having
     regard to his/her behaviour during the marriage, reasonably be expected to
     live with this respondent.’ Bagnall J
   Effect of R’s behaviour is crucial
   Objective test; Can P reasonably be expected to live with R?
   Subjective test; must consider the effect of R’s behaviour on the particular P.
   Court should take account of particular personality of P
   Birch v Birch [1992] I FLR 564 dogmatic behaviour, particular petitioner, P
     successful as a sensitive person verses dogmatic respondent
   ‘P’ behaviour in response may negate grounds – ie mutually bad behaviour
   Note even a series of minor incidences may satisfy grounds
  
   O’Neill v O’Neill [1975] 3 All ER 289 – must relate to behaviour and not the
     personality of R
   Le Brocq v Le Brocq [1964] 3 All ER 464
   Carter-Fea [1987] Fam Law 131 - financial responsibility - where the wife
     was able to demonstrate that she lived in a world of unpaid bills

Consideration should also be given to the grounds required to satisfy adultery under
s1(2)(a) MCA 1973 which Chez has alluded to. Candidates would need to discuss
what Chez needs to prove in order to be successful and how it will be difficult for her
on the facts provided to substantiate this ground;
Adultery s1(2)(a) MCA 1973
     act of voluntary heterosexual intercourse between two people who are not
      married to each other, but at least one of whom is married.
     Respondent (R) usually acknowledges adultery on acknowledgement of
      service form
     Penetration actually needs to have occurred – P might find this ground
      difficult to substantiate on the facts provided.
     Dennis v Dennis [1995] All ER 51 Found W had not committed adultery as
      penetration had not occurred as a result of a nervous disposition
     Chez may be able to use this ground if Ash is prepared to admit to adultery,
      unlikely though given the circumstances and what he would stand to loose

Chez will also need to prove the second part of the grounds linked to adultery:

Intolerability
      Must be proved in addition to adultery - petititoner (P) finds it intolerable to
       live with R. An act of adultery is not sufficient in itself to end a marriage
      Cleary v Cleary [1974] 1 WLR 73 intolerability need not be related to the
       adultery – there does not need to be a causal link – Chez may be able to use
       some of the other factors to support this ground.
      Or can it be that the P would just prefer to live with someone else –
       intolerability must be genuine (Cleary) – unlikely to apply in this case
      Test for intolerability – subjective – Do you find it intolerable to live with the
       petitioner? On the facts provided it would seem to be the case.
      Reconciliation provision s2(3) not relevant

Finally consideration can be given to how Chez may in the future
(20 months as Chez may be able to successfully argue on the facts that they have
lived separately now for 4 months) be able to establish arguably, the only consensual
ground, two years separation.

Two years separation with consent to the Divorce s1(2)(d) MCA 1973
   Requires 2 years separation immediately prior to a divorce being granted, the
      least antagonistic cause to some extent but would Ash allow this to happen?
   Parties must live in separate households;
   MCA 1973 s2(6) a couple are living apart unless they are living together in the
      same accommodation note interpretation of case law
   Two separate households must be established – no common domestic life
   Hollens v Hollens (1971) 115 SJ 327 lived in same house but did not speak,
      eat together or sleep together cf Mouncer v Mouncer [1972] 1 All ER 289
   Fuller v Fuller [1073] 1 WLR 730
   Santos v Santos [1972] Fam 247 – Chez must demonstrate a wish to live
      apart.




4. Starting point is statutory factors in s25 MCA to which court “is to have
regard”. Of particular relevance here are factors of
    Income and earning capacity
    Needs and obligations
    Duration of marriage
    The standard of living
      Contributions
      All the circumstances

These factors give court a very wide discretion but do not provide guidance as
to how the discretion should be exercised. The courts have tried to fill this
gap. All the leading cases stress the search is for a fair outcome.

Until White(2001), the approach of court in high value divorces was to give W
just enough to meet her needs or “reasonable requirements” even if the
marriage was long. In short marriages with no children this might mean simply
restoring the wife to her pre-marriage position and even in longer marriages
this usually meant W received much less than equality. But in White, the HL
introduced concept of the “yardstick of equality”: equality should only be
departed from if there was a good reason for doing so.

In Miller;McFarlane (2006) the HL identified three strands in the search for
fairness: equal sharing, needs and compensation. Miller involved a 3 year
marriage between parties in their 30s with no children, where H was a rich
businessman before the marriage and his assets increased by £15m during
the marriage, making a total of about £32m. The HL upheld a clean break
award of £5m to W, holding W should have a share of the increase in assets
during the marriage and that the high standard of living was a key feature.
But, having regard to the source of the assets, equal sharing could be
departed from. Particularly in a short marriage, where assets were owned
prior to the marriage or (per Lady Hale) attributable to the business efforts of
one party, equal sharing of these could be departed from to achieve fairness if
there were other assets sufficient to meet needs.

In McCartney (2008), after a 4 year marriage producing one child, Heather
Mills received a clean break award of £16.5m (including capitalised joint lives
maintenance) in addition to £7.3m she had already received, despite evidence
that there was only a modest increase in Paul McCartney’s £400K fortune
during the marriage and this was mostly due to increases in value of pre-
marriage assets. This award was based on a generous assessment of her
needs.

Since these decisions, the CA in Charman (2007) has reiterated that pre-
owned and other “non-matrimonial” property may provide a reason for
departing from equality, and that in short marriages the equal sharing principle
may not apply to business assets generated by only one party. However it
would appear from Miller and McCartney that even if these approaches are
followed, and even where there is no element of compensation in the award,
in the case of a very rich husband the wife’s award is still likely to be
substantial, based on either a generous assessment of her needs, taking into
account the parties’ standard of living, or on sharing the “matrimonial” assets.
Although far off equality, in the case of a very wealthy husband the award
may still be sufficient to allow her to live in comfort for the rest of her life
without having to work, thus supporting Ruth Deech’s observation.
The wealthy husband may seek to protect himself through a pre-nuptial
agreement, which the court may take into account as one of the
“circumstances” under s 25 if it considers it just to do so. Although in MacLeod
(2008) the PC refused to reverse the rule that pre-nups are not contractually
binding, the CA in the even more recent case of Radmacher v Granatino
(2009) made forceful arguments in favour of holding spouses to pre-nups. The
CA thought that adults should have the option of regulating their own
arrangements on divorce and said that in future more weight should be given
to pre-nups freely entered into by the parties. In Radmacher, the CA held that
the H should be held to the terms of the pre-nup (under which he personally
was to receive nothing) save insofar as provision was needed during the
children’s minority. As a result of this decision, it is likely that many more
wealthy people will wish to negotiate pre-nuptial agreements.


5.

(a)   As regards the capital settlement, there are three possibilities to
consider: variation, application to set aside, and an appeal.

Capital orders are intended to be final and the MCA does not allow for
variation, except for lump sums payable by instalments (s 31).

Nor is it possible to set aside an order and re-hear the case unless there has
been some fraud or non-disclosure or mistake which would have affected the
outcome: Livesey v Jenkins; Cornick v Cornick.

However, in exceptional cases, leave to appeal out of time may be given if

      New events have occurred which undermine the basis or fundamental
        assumption on which the order was made
      it is within a relatively short time
      application for leave to appeal made reasonably promptly

these principles being enunciated by the HL in Barder v Calouri (1988) (leave
given when W killed children and committed suicide). Where application is
made on the grounds that the value of an asset has changed since the date of
the order (as in Jake’s case) the cause of the change must be something
other than natural processes of price fluctuation: Cornick v Cornick (1994). It
has to be an unforseeable supervening event: Walkden v Walkden (2009). In
the recent case of Myerson v Myerson (2009) the value of the husband’s
shares in his company had plummeted due to the credit crunch, leaving him
with no net assets at all, while the wife had several million. Despite this, the
court did not find the credit crunch to be the necessary ‘dramatic subsequent
event’, and said the fall in value was simply the result of natural price
fluctuation. Reliance was also placed on the fact that the order was the result
of a settlement under which Mr Myerson had elected to keep his business
(taking the risk of profit or loss), and the fact that he still had the option of
applying to vary a lump sum by instalments order.
In Jake’s case, although unlike Myerson he has no variation option, it would
seem that based on the authorities, a Barder application is unlikely to
succeed. The failure of Jake’s business is not a sufficiently sudden or
dramatic unforseeable event and could be characterised as a natural result of
changes in the economy, which are a possibility for a small business at any
time. Jake should therefore be advised that there is very little chance of
challenging the capital aspects of the order.

(b)     Unlike capital orders, maintenance orders are always subject to
variation if there has been a change of circumstances (s 31 MCA). Jake may
therefore apply to the court to vary both the spousal and child maintenance
orders on the ground that his income has greatly reduced, and in the case of
Davina on the ground of her cohabitation.

The s 25 and s25A factors will all be taken into account, but clearly the
respective resources, incomes, earning capacities, needs and obligations of
Jake and Davina will be the most important factors. Even if Davina is now
earning more, or is cohabiting, and no longer needs maintenance for herself,
it is unlikely the court would order a clean break: Suter & Suter v Jones;
Atkinson v Atkinson, but maintenance could be reduced to a nominal level.
However if Davina remarries her entitlement to maintenance will automatically
cease (s 28).

As regards the children’s maintenance, the court has power to vary an order
that was made by consent (s8(3A) CSA 1991) but once 12 months have
elapsed from the date of the order, Jake could instead apply to the
CSA/CMEC for a maintenance calculation based on his current income. With
an income of £1500 pm, his maintenance obligation should be decreased
substantially. A maintenance calculation would supersede the court-ordered
maintenance and the court would no longer have jurisdiction. Although the
court should use a similar approach to the CSA in setting the level of
maintenance, GW v RW, the CSA process might be simpler and cheaper for
Jake than going to court.

Jake should therefore be advised that his chances of reducing his
maintenance obligations to both Davina and the children are good.