Cohabitation Bill [HL]

House of Lords

Session 2008 - 09
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Other Bills before Parliament

Cohabitation Bill [HL]

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Cohabitation Bill [HL]
Schedule 1 — Financial settlement on ceasing to live together
Part 1 — Financial settlement orders and interim payments

Schedules
Schedule 1
Section 11(4)

Financial settlement on ceasing to live together
Part 1
Financial settlement orders and interim payments
5
Introductory
1
In this Part of the Schedule, “specified”, in relation to a step which a financial
settlement order requires to be taken, means specified in the order.
2
If the court decides to grant an application for a financial settlement order—
(a)
it may require either the applicant or the respondent to take such of
10
the steps set out in paragraphs 3 to 6 as may be specified in the order,
and
(b)
it may vary or revoke the terms of the order at any time afterwards.
Orders requiring periodical and secured periodical payments and lump sums
3     (1)
In a financial settlement order, the court may require that either the
15
applicant or the respondent—
(a)
must make to the other such periodical payments for such term as
may be specified;
(b)
must secure to the other, to the satisfaction of the court, such
periodical payments for such term as may be specified;
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(c)
must pay to the other such lump sum or sums as may be specified;
(d)
if the court decides under section 10(2) to require payment of
reasonable costs of child care, must make or secure to a specified
person such periodical payments, lump sum or lump sums as may
be specified.
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      (2)
The power to require in a financial settlement order that periodical
payments be made to any person is subject to the three year limit specified
in section 10(3) (but this is subject to section 10(4)).
      (3)
Where a financial settlement order requires the payment of a lump sum, the
order may—
30
(a)
provide for payment of the sum by installations of a specified
amount, and
(b)
require the payment of instalments to be secured to the satisfaction
of the court,

but this does not restrict the powers of the court to impose requirements
35
under sub-paragraph (1)(c).

Cohabitation Bill [HL]
Schedule 1 — Financial settlement on ceasing to live together
Part 1 — Financial settlement orders and interim payments
13

      (4)
If the court—
(a)
makes a financial settlement order requiring the payment of a lump
sum, and
(b)
directs that—
(i)
payment of the sum or any part of it is to be deferred, or
5
(ii)
the sum or any part of it is to be paid by instalments,

the court may provide for the deferred amount or the instalments to carry
interest at a specified rate from a specified date until the date when payment
of it is due.
      (5)
A date specified under sub-paragraph (4) must not be earlier than the date
10
of the financial settlement order.
Orders requiring adjustments to property
4     (1)
In a financial settlement order, the court may require—
(a)
that the applicant or the respondent must transfer specified property
to which he or she is entitled to the other of them;
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(b)
that a settlement of a specified property to which the applicant or the
respondent is entitled be made to the satisfaction of the court for the
benefit of the other of them;
(c)
that a relevant settlement be varied for the benefit of the applicant or
the respondent, or both of them;
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(d)
that the interest of either the applicant or the respondent under a
relevant settlement be extinguished or reduced.
      (2)
In sub-paragraph (1)—
“entitled” means entitled in possession or reversion;
“relevant settlement”, in relation to the applicant and the respondent
25
means a settlement made on them whilst they were living together
as a couple or in anticipation of them living together as a couple,
and—
(a)
it includes a settlement made by will or codicil, but
(b)
it does not include a settlement in the form of a pension
30
arrangement (within the meaning of paragraph 6(3)(d)).
Orders requiring sale of property
5     (1)
This paragraph applies in any case where the court proposes to include in a
financial settlement order a requirement under—
(a)
paragraph 3(1)(b) to make a secured periodical payment,
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(b)
paragraph 3(1)(c) to make a lump sum payment, or
(c)
paragraph 4(1) to make an adjustment to property.
      (2)
In the same financial settlement order or by way of subsequent variation, the
court may require the sale of specified property in which, or in the proceeds
of sale of which, either the applicant or the respondent (or both) has or have
40
a beneficial interest, either in possession or reversion.
      (3)
Where—
(a)
the court is considering whether to require the sale of a property, and
(b)
another person (“C”) also has a beneficial interest in the property or
the proceeds,
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Cohabitation Bill [HL]
Schedule 1 — Financial settlement on ceasing to live together
Part 1 — Financial settlement orders and interim payments
14


the court must give C an opportunity to make representations with respect
to the proposed sale and, in determining whether to require the sale, it must
have regard to any representations made by C.
      (4)
Any financial settlement order requiring a sale of property may contain such
consequential or supplementary provisions as the court considers
5
appropriate.
      (5)
Such provision may, in particular—
(a)
require the making of a payment out of the proceeds of sale of the
property to which the financial settlement order relates, and
(b)
require any property to which the order relates to be offered for sale
10
to a specified person, or class of persons.
Orders requiring pension sharing
6     (1)
In a financial settlement order, the court may require that the applicant or
the respondent’s—
(a)
shareable rights under a specified pension arrangement, or
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(b)
shareable state scheme rights,

are to be subject to pension sharing for the benefit of the other and, if the
court imposes such a requirement, it must specify the percentage value to be
transferred.
      (2)
If a pension sharing order relates to rights under a pension arrangement, the
20
court may include in the order provision about the apportionment between
the applicant and the respondent of any charge under section 41 of the 1999
Act (charges in respect of pension sharing costs).
      (3)
In this paragraph—
(a)
“the 1999 Act” means the Welfare Reform and Pensions Act 1999
25
(c. 30);
(b)
references to shareable rights under a pension arrangement are to
rights in relation to which pension sharing is available under
Chapter 1 of Part 4 of the 1999 Act;
(c)
references to shareable state scheme rights are to rights in relation to
30
which pension sharing is available under Chapter 2 of Part 4 of the
1999 Act; and
(d)
“pension arrangement” means any of the following—
(i)
an occupational pension scheme,
(ii)
a personal pension scheme,
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(iii)
a retirement annuity contract,
(iv)
an annuity or insurance policy purchased, or transferred, for
the purpose of giving effect to rights under an occupational
pension scheme or a personal pension scheme, and
(v)
an annuity purchased, or entered into, for the purpose of
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discharging liability in respect of a pension credit under
section 29(1)(b) of the 1999 Act.
      (4)
In sub-paragraph (3)(d)—
“personal pension scheme” and “occupational pension scheme” have
the same meaning as in the Pension Schemes Act 1993 (c. 48);
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Cohabitation Bill [HL]
Schedule 1 — Financial settlement on ceasing to live together
Part 2 — Consent orders
15

“retirement annuity contract” means a contract or scheme approved
under Chapter 3 of Part 14 of the Income and Corporation Taxes Act
1988 (c. 1).
Requirement to make interim payments
7
At any time before determining an application for a financial settlement
5
order, the court may require the applicant or the respondent to make to the
other for the other’s maintenance such periodical payments for such term—
(a)
beginning no earlier than the date on which the application was
made, and
(b)
ending with the date on which the application is determined,
10

as the court considers reasonable.
Part 2
Consent orders
Making a consent order
8
Regardless of anything in Part 1 of this Schedule, on an application for a
15
consent order under this paragraph, the court may, unless it has reason to
think that there are other circumstances into which it ought to inquire, make
an order in the terms agreed on the basis only of such information supplied
with the application as is required by rules of court.
Interpretation
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9     (1)
In this Part of this Schedule—
“consent order”, in relation to an application for an order, means an
order in the terms applied for to which the respondent agrees;
“relevant agreement” means any agreement in writing between former
cohabitants which is made after they have ceased living together as
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a couple and contains financial arrangements.
      (2)
For these purposes, “financial arrangements” means—
(a)
provisions governing the rights and liabilities towards one another,
once former cohabitants have ceased living together as a couple in
respect of—
30
(i)
the making or securing of payments, or
(ii)
the disposition or use of any property, and
(b)
includes such rights and liabilities with respect to the maintenance or
education of a relevant child.
      (3)
In sub-paragraph (2)(b), “education” includes training.
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Validity of relevant agreements
10    (1)
If a relevant agreement includes a provision purporting to restrict any right
to apply to a court for an order containing financial arrangements—
(a)
that provision is void, but
(b)
any other financial arrangements contained in the relevant
40
agreement—
(i)
are not void or unenforceable as a result, and

Cohabitation Bill [HL]
Schedule 1 — Financial settlement on ceasing to live together
Part 2 — Consent orders
16

(ii)
unless void or unenforceable for any other reason, are
binding on the parties to the agreement (but this is subject to
any alteration made under paragraph 11).
      (2)
Nothing in sub-paragraph (1)(a) affects the validity of any opt-out
agreement entered into in accordance with section 12.
5
Alteration of relevant agreements by court during lives of the parties
11    (1)
Either party to a relevant agreement may apply to the court for an order
under this paragraph if—
(a)
the relevant agreement is for the time being subsisting, and
(b)
each of the parties to it is for the time being domiciled or resident in
10
England and Wales.
      (2)
The court may make an order under this paragraph if it is satisfied that—
(a)
because of a change in the circumstances in the light of which—
(i)
any financial arrangements contained in the relevant
agreement were made, or
15
(ii)
financial arrangements were omitted from it,

the relevant agreement should be altered so as to make different
financial arrangements or so as to contain financial arrangements, or
(b)
that the relevant agreement does not contain proper financial
arrangements with respect to any relevant child.
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      (3)
In sub-paragraph (2)(a), the reference to a change in the circumstances
includes a change foreseen by the parties when making the relevant
agreement.
      (4)
An order under this paragraph may make such alterations in the relevant
agreement—
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(a)
by varying or revoking any financial arrangements contained in it, or
(b)
by inserting in it financial arrangements for the benefit of one of the
parties to the relevant agreement or of a relevant child,

as appear to the court to be just and equitable having regard to all the
circumstances.
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      (5)
The effect of the order is that the relevant agreement is to be treated as if any
alteration made by the order had been made by agreement between the
former cohabitants and for valuable consideration.
Provisions relating to periodical and secured periodical payments: duration
12    (1)
If a court decides to make an order under paragraph 11 altering a relevant
35
agreement—
(a)
by inserting provision for the making or securing by one of the
parties to the relevant agreement of periodical payments for the
maintenance of the other party, or
(b)
by varying the rate of the periodical payments which the relevant
40
agreement provides is to be made by one of the parties for the
maintenance of the other,

it may specify such term as it thinks fit as the term for which the payments
or, as the case may be, the additional payments attributable to the variation
are to be made under the altered agreement.
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Cohabitation Bill [HL]
Schedule 1 — Financial settlement on ceasing to live together
Part 3 — Miscellaneous
17

      (2)
For the purposes of sub-paragraph (1)—
(a)
the power conferred by that sub-paragraph is subject to the three
year limit specified in section 10(3) (but this is subject to section
10(4)), and
(b)
the requirements specified in section 10(5) and (6) as to the
5
termination of any requirement to make periodical payments also
apply.
Saving
13
Nothing in this Part of this Schedule affects—
(a)
any power of a court before which any proceedings between the
10
parties to a relevant agreement are brought under any other
enactment (including a provision of this Schedule) to make an order
containing financial arrangements, or
(b)
any right of either party to apply for such an order in such
proceedings.
15
Part 3
Miscellaneous
Avoidance of transactions intended to prevent or reduce financial relief
14    (1)
This paragraph applies in proceedings brought by one person (“A”) against
another (“B”) for the purpose of obtaining any financial relief by virtue of a
20
financial settlement order.
      (2)
If the court is satisfied, on an application by A, that B is, with the intention
of defeating A’s claim for financial relief, about to—
(a)
make any disposition, or
(b)
transfer out of the jurisdiction or otherwise deal with any property,
25

it may make such order as it thinks appropriate for restraining B from doing
so or otherwise for protecting the claim.
      (3)
If the court is satisfied, on an application by A—
(a)
that B has, with the intention of defeating A’s claim for financial
relief, made a reviewable disposition, and
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(b)
that if the disposition were set aside, financial relief or different
financial relief would be granted to A,

the court may make an order setting aside the disposition.
      (4)
If the court is satisfied, on an application by A in a case where a financial
settlement order has been obtained by A against B, that B has, with the
35
intention of defeating A’s claim for financial relief, made a reviewable
disposition, it may make an order setting aside the disposition.
      (5)
An application for the purposes of sub-paragraph (3) must be made in the
proceedings for the financial relief in question.
      (6)
If the court makes an order under sub-paragraph (3) or (4) setting aside a
40
disposition it must give such consequential directions as it thinks
appropriate for giving effect to the order (including directions requiring the
making of any payments or the disposal of any property).

Cohabitation Bill [HL]
Schedule 1 — Financial settlement on ceasing to live together
Part 3 — Miscellaneous
18

Provision supplementary to paragraph 14
15    (1)
Any reference to paragraph 14 to defeating A’s claim for financial relief is
to—
(a)
preventing financial relief from being granted to A,
(b)
reducing the amount of any financial relief which might be so
5
granted, or
(c)
frustrating or impeding the enforcement of any financial settlement
order which might be or has been made at A’s instance.
      (2)
In paragraph 14 and this paragraph “disposition”—
(a)
does not include any provision contained in a will or codicil, but
10
(b)
subject to paragraph (a), includes any conveyance, assurance or gift
of property of any description (whether made by an instrument or
otherwise).
      (3)
Any disposition made by B (whether before or after the commencement of
the proceedings for financial relief) is a reviewable disposition for the
15
purposes of paragraphs 14(3) and (4) unless it was made—
(a)
for valuable consideration (other than marriage), and
(b)
to a person who, at the time of the disposition, acted in relation to it
in good faith and without notice of any intention on B’s part to defeat
A’s claim for financial relief.
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      (4)
If an application is made under paragraph 14 with respect to a disposition
which took place less than 3 years before the date of the application, or with
respect to a disposition or other dealing with property which is about to take
place, and the court is satisfied—
(a)
in a case falling within paragraph 14(2) or (3), that the disposition or
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other dealing would (apart from paragraph 14) have the
consequence of defeating A’s claim for financial relief, or
(b)
in a case falling within paragraph 14(4), that the disposition has had
the consequence of defeating A’s claim for financial relief,

it is presumed, unless the contrary is shown, that the person who disposed
30
of or is about to dispose of or deal with the property did so or, as the case
may be, is about to do so, with the intention of defeating A’s claim for
financial relief.
Arrears
16    (1)
This paragraph applies if—
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(a)
arrears are due under any financial settlement order or any other
made under, or by virtue of, this Schedule, and
(b)
the arrears became due more than 12 months before proceedings to
enforce the payment of them are begun.
      (2)
A person is not entitled to enforce through the High Court or any county
40
court the payment of the arrears without the leave of that court.
      (3)
The court hearing an application for the grant of the leave under this
paragraph may—
(a)
refuse leave,