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Financial Claims after Divorce

In the case of Wyatt v Vince, the Supreme Court today ruled that a wife’s financial claim against her former husband should be allowed to proceed 31 years after the parties stopped cohabiting and 22 years after they divorced.

Background 

The parties were married in December 1981 and had one son together. The wife, Ms Wyatt, also had a daughter from a previous relationship who was treated as a child of the family by the husband, Mr Vince.

Since allegedly separating in 1984, the wife had raised both children in very difficult circumstances. Whilst there were periods of reconciliation, the husband Mr Vince, (whom the Court described as having a “new-age travelling” lifestyle), was in no position to contribute financially at that time.

The parties eventually divorced in 1992 but the Court mislaid their entire file and neither party retained any documentation other than the decree absolute. It is therefore unknown whether any order for financial provision was made.

Mr Vince went on to establish a successful green energy business in the late 1990’s and became a multi –millionaire, whilst the wife’s financial circumstances remained (and still are) relatively modest. The wife went on to have two more children.

In 2001, at the age of 16, the parties’ son went to live with his father.

The wife issued a financial application in 2011, almost 20 years after the decree absolute was made, and the husband sought to have wife’s claim struck out under the Family Proceedings Rules, arguing that it was an “abuse of process” and that she had “no reasonable grounds” to bring the application.

In December 2012 the Family Division of the High Court dismissed the husband’s application and ordered him to pay a total costs allowance to the wife of £125,000. The husband successfully appealed to the Court of Appeal and in June 2013 the wife’s financial application was struck out and she was ordered to repay the husband over £36,000.

The wife appealed to the Supreme Court and judgment was handed today.

Judgment 

The Supreme Court unanimously allowed the wife’s appeal, the High Court’s original costs Order was restored and the Court directed that the case be reheard in the Family Division of the High Court.

The Court made some significant rulings which are considered below.

Consideration of summary judgment in financial applications

In handing down judgment, Lord Wilson compared the Court’s jurisdiction under the Family Procedure Rules to those under the Civil Procedure Rules and held that the Court has no power to give summary judgment.

He held that when an ex-spouse applies for a financial order, the Court has a duty under the Matrimonial Causes Act 1973 to determine the application having regard to all the circumstances of the case. In assessing whether there are “reasonable grounds” to bring an application or whether the application is an “abuse of process” the Court should not consider whether there is a “real prospect of success”.

Whilst the wife would not have been able to bring the claim if the proceedings had already been determined or if she had remarried, in this case, her application was legally recognisable and could not be viewed as an abuse of process and would therefore not be struck out.

The suitability of Costs Allowance Orders

Since April 2013 it is possible for the Court to make a costs allowance order, requiring one party to a marriage to pay the other an amount “for the purpose of enabling [them] to obtain legal services for the purpose of the proceedings”. This was the Order that the High Court had made against the husband.

The husband had appealed against the Order, however, arguing it should not have been made where wife could reasonably secure legal service by other means.

The Supreme Court confirmed that the test for making the order was whether the wife could “reasonably secure legal services by any other means”.

In this case the Court held that it was not reasonable to expect the wife’s solicitors to act without payment and the Costs Allowance Order was upheld.

This may prove an important decision going forward but, as ever, the Court’s decision will depend on the circumstances of the particular case.

A “highly unusual” case

Whilst the decision of the Court may seem on the face of it to be a victory for the wife, the Court noted the “formidable difficulties” which she will face in seeking to establish that a financial order should be made in her favour.

In any financial application, the Court must have regard to the various factors (Section 25 factors) including the parties’ income, earning capacity and financial resources; their needs; the standard of living enjoyed by the family before the marriage broke down; the parties ages; the duration of the marriage; and the contributions to the welfare of the family.

Lord Wilson briefly considered the issues in this case which would eventually fall to be determined by the High Court.

The Court described the circumstances of this case as “highly unusual”. The parties only lived together for 2 years of their marriage and ceased cohabiting some 31 years before the wife issued her application. The standard of living the family enjoyed “could not have been lower” and the husband did not begin to accrue his wealth until some 13 years after the relationship broke down. Furthermore, the wife made no contribution towards establishing the husband’s wealth.

The success or otherwise of the wife’s financial application is yet to be determined. Whilst the £1.9m which is sought by the wife was considered to be entirely out of the question, a claim for a potentially modest amount does exist.

The fact remains that marriage creates “potentially life-long obligations” and, accordingly, there is no time-limit for bringing applications for financial provision or property adjustment following divorce.

This case therefore serves as a reminder of the importance of finalising all financial issues arising out of the breakdown of a marriage in early course, whether via Court proceedings or in the form of an agreed Consent Order.