M v M – more than just costs by Nick Power
Wed 10th Jun 2020
The recent flurry of legal observers commenting on the eye-watering and disproportionate costs incurred in this case such that out of £630,000 liquid capital, £594,000 had been spent on costs has justifiably attracted much attention. There is however, within this case, an incredibly helpful analysis for practitioners as to when, and in what manner, the court can have regard to family support which may be available in the future for the parties.
Robert Peel QC, sitting as a Deputy High Court Judge, considered the extent to which monies which may be made available to the wife from her family to meet her housing needs were a resource which should be taken into account.
He sets out 2 categories of case in which this issue arises.
1) Where a spouse has an interest in an asset with others such that the court may judiciously encourage the family to assist – commonly known as the Thomas v Thomas jurisdiction; and
2) Where family members who have no duty to assist but are willing to do so.
The second category is often encountered in practice. The Judge sets out the following principles which should be applied in such circumstances:-
a) The starting point is that there is no obligation on a third party family member to assist and the court has no jurisdiction to distribute the resources of wider family;
b) There are however circumstances where family members have shown themselves willing to assist in either supporting their family member directly or offering to fund a payment to the other spouse;
c) To take into account the willingness of a family member to support a spouse, or their former spouse, there must be clear evidence of their willingness to do so. “Mere speculation or optimistic assumption is insufficient”;
d) The court should not place pressure on the third party;
e) Where the evidence shows that family members are likely to provide financial support that “constitutes a resource that a court is entitled to take into account”. Relevant evidence is:-
i) Whether or not bounty has been provided in the past, in what quantity and over what time;
ii) Whether specific offers of support have been made, either before or after separation;
iii) Offers of interim financial support are of limited assistance;
iv)Absent clear evidence establishing a track record of payments or representations of future payment the court is “hard pressed to be satisfied of this class of resource”.
In the context of this case the Judge determined that past financial support from the wife’s parents for the children and an offer at the time of separation from her brother to re-mortgage the family home to buy out the husband’s interest and her open proposal which would leave her unable to buy a property meant that he was “quite sure that her wider family will not see her homeless”.
The net effect of the order was to leave W with only £5,368 after repayment of her debts. She had a mortgage capacity of £132,000 meaning that her family would have to provide support to the extent of almost £250,000 for her to meet her housing need. In contrast the husband, whilst having the same lump sum available after payment of his debts would be able to drawdown on his pension and together with his mortgage capacity have sufficient to buy a home.
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