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The dangers of failing to address matrimonial finances in a timely manner

The case of Wyatt v Vince has very recently concluded after almost five years of litigation in the High Court, Court of Appeal and Supreme Court. The case is a very important family law case as it sets out the position for ex-spouses applying for a financial remedy many years after the original divorce proceedings have concluded.

In this case, the wife and husband were married in 1981, they had a child together in 1983 and separated in 1984. They divorced in 1992 when Decree Absolute (A Court Order officially ending the marriage) was granted. At the time of the marriage (and the divorce) there were no assets of any significance and the parties therefore left their financial claims against one another open. The husband then set up a wind power business in 1996 which, by 2011, was worth in the region of £90million. The wife subsequently issued an application for a financial remedy.

The initial hearing took place before a Deputy High Court Judge, in which the wife was awarded interim periodical payments of £31,250 for four months (being £125,000 in total). The husband appealed against this decision and the matter was heard by the Court of Appeal who found in favour of the husband. Somewhat unsurprisingly, the wife appealed to the Supreme Court who restored the original judgment from the High Court. 

The key issue in this case was simply whether the Family Procedure Rules (FPR) should be interpreted so as to mirror the Civil Procedure Rules (CPR), insofar as permitting the Court to strike out an application with no real prospects of success, particularly when coupled with a significant delay in bringing the application. Lord Justice Jackson of the Court of Appeal said that the provisions of FPR did mirror those of the CPR. Lord Walker of the Supreme Court, however, disagreed and overruled. 

It has been reported that the case is now settled, following a financial dispute resolution hearing in the family division and the publishing of Mr Justice Cobb's judgment. It was reported that the wife received the total sum of £625,000. However, given the lengthy proceedings and the cost of litigation in the appellate courts, this sum is likely to be used almost entirely to pay for the wife's legal costs, though details of the wife's costs were not reported so we will never know quite how much she was actually left with. 

This case should be viewed as a cautionary tale of the risks of not dealing with matrimonial finances at the time of divorce. If a Consent Order had been implemented when the couple divorced in 1992 then the wife would have been unable to bring her application in 2011. The Court has made it clear that there is no limitation period preventing a spouse or former spouse from bringing an application for a financial remedy (subject to claims remaining open), though the strength of their claim may well diminish over time. Of course, this case is somewhat unusual in that the wife was unable to pursue a claim against the husband at the time of divorce, given that the husband had not yet accumulated his wealth. 

In summary, although the husband's contribution of £650,000 is a mere fraction of his net worth, the inconvenience and stress involved in protracted litigation such as this, over a period of five years, could easily have been avoided if the parties had simply dismissed their claims through a Consent Order at the time of the divorce proceedings in 1992. Divorcing couples should therefore always consider severing not just the marriage, but also their financial ties and future financial claims as it is impossible to know what the future holds.

Our family team regularly advise on issues relating to divorce, finances and the division of assets. If you would like to discuss any of these issues, please contact us today.  

Posted in: Family

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