Divorce – financial provision

The Family Courts have wide ranging powers to order one party to a marriage to make financial provision for the other. There is no doubt that the Family Courts have ample power to order, say, a husband to make provision for his wife out of his own property or even to transfer his own property to her. What happens if there is property from which the husband may or does benefit, but which does not belong to him? An obvious example will be property held in trust for the benefit of the husband. If the trusts arise from what is commonly called a ‘nuptial’ settlement, then s24(1)(c) Matrimonial Causes Act 1973 gives the court power to vary the settlement. Otherwise, the Family Courts cannot directly make orders affecting property held on discretionary trust from which one of the parties may benefit. That is not, of course, by any means the end of the story. What the Family Courts have done is to develop the concept of giving ‘judicial encouragement’ to trustees, in effect by making an Order which the beneficiary will have difficulty in satisfying without the assistance of the trustees. Another circumstance where the Family Courts may have to address similar issues is where substantial property is held by a company in which a party to the marriage has some interest, or over which that party can exert infiuence. This is the situation considered by the Court of Appeal in Petrodel Resources v Prest [2012] EWCA Civ 1395 .