The importance of finalising finances during divorce!

Relationship breakdown

posted: 2nd March 2017

During the difficult time of a separation, many couples will focus on getting their divorce finalised without giving a second thought to their finances. Our advice to clients is to deal with the finances of the marriage and divorce at the same time – ensuring the divorce is only finalised once a financial order has been agreed or a consent order has been drawn up and sealed by the court. This is important because once you are divorced your legal position changes in regards to your spouse.

We have noted that many litigants in person, (individuals who are not represented by a solicitor or barrister), will primarily focus on getting their divorce finalised so they can move on with their lives. You may not have had the money at the time to deal with finances or you may have been duped by the other party into believing they will agree finances between you without the need for legal advice. The bottom line is that it is extremely important prior to a divorce being finalised to achieve a clean break, as far as this is possible, from your former spouse. We understand this may not be possible, but having a legally binding order in place that separates you financially from your ex-spouse affords you a degree of financial stability and security. A clean break may not be possible where there are children of the family to consider however at PMC Family Law Solicitors we are able to look at your individual circumstances to achieve a result that is justified.

The question which arises however is how long after you are divorced can you deal with your finances and are you still able to? Is there a time limit imposed by the law that does not allow you to do this?

Many of you will be aware of the Vince v Wyatt case that was in the news in 2015. The background to this case is that Ms Wyatt and Mr Vince met at a young age and married in 1981. They had one child together and separated in 1984. During their marriage they lived off state benefits. Ms Wyatt then lived a modest lifestyle whilst Mr Vince developed a wind turbine company that has been phenomenally successful, to the extent that it was calculated at being worth at least £57 million. Mr Vince re-married and had a further child. In 2011 Mrs Wyatt issued an application for a lump sum and interim periodical payments in the sums equal to her estimated costs. The parties son was 31, working for the husband and had lived with him since he was 18. Mr Vince applied for her application to be struck out.  A court is able to strike out an application if firstly, it appears that the statement of case has no reasonable grounds or secondly if bringing or defending an application or the statement of case is an abuse of the court’s process.

Mr Vince’s case was struck out in the High Court and he was ordered to make interim payments to Mrs Wyatt’s solicitors for her legal costs. Mr Vince appealed this decision before the Court of Appeal who decided this was unreasonable and no order should have been made. Mrs Wyatt then appealed to the Supreme Court which was unanimously allowed by the five Justices. The Justices decided that a case cannot be struck out where it is legally recognisable. It does not matter whether there is any real prospect of success.

The decision of the Supreme Court ultimately enforced that a case cannot be struck out without considering the evidence and applying the s.25 of the Matrimonial Causes Act criteria, even if a case does not have any real prospect of success. The s.25 criteria includes factors such as; income and earning capacity; financial needs, obligations and responsibilities; duration of the marriage; contributions each party has or is likely to make to the welfare of the family etc. It has therefore been argued that the Supreme Court have inadvertently given a financially weaker party, such as Mrs Wyatt in this case, with a wealthier ex-partner, Mr Vince, a route to a financial remedy where there are limited or no merits to the case. This is because the marriage was relatively short, they had both lived their lives and there was an extensive delay before the application was made for a financial remedy.

The case went on to settle with Mrs Wyatt receiving a one off lump sum from Mr Vince for £300,000 in full and final satisfaction of all claims – income, pension, capital, property adjustment and inheritance.

Lord Wilson in Wyatt v Vince stated that “in order to sustain a case of need, at any rate if made after many years of separation; a wife must show not only that the need exists but that it has been generated by her relationship with her husband”.

This case was relied upon in the case of Waudby v Aldhouse. Here the parties married in 1982 and obtained Decree Absolute ending their marriage in 1995. They did not have any children together however the Husband went on to have 2 children with his second wife. The wife quickly obtained the divorce but did nothing to pursue any financial claim as the Husband provided her with assurances that he would voluntarily provide for her and “see her right”. In 2014 the Wife issued proceedings to obtain a financial remedy. In the first instance, the Deputy District Judge concluded the husband was culpable for the impact of the delay and ordered he pay the Wife a lump sum of £10,000 and joint lives periodical payments order for £9576 per year. The Deputy District Judge found that there was a causal link between the Wife’s breakdown and subsequent health problems, the discovery of the Husband’s affair, confronting her own childlessness, her loss of her home and bankruptcy, and the Husband’s conduct in “stringing her along”. He ruled this impacted the Wife’s earning capacity.

The Husband appealed this decision arguing that it was wrong in law and outside the reasonable ambit of judicial discretion after such a delay to make the above orders. HHJ Rogers granted the Husbands appeal finding his point raised was substantial, persuasive and with a real prospect of success. HHJ Rogers concluded that the orders made by the Deputy District Judge be dismissed, stating that attributing the Wife’s ill health to events that occurred more than 20 years ago and to the marriage without a firm expert or other evidential basis had simply been wrong.  A further point to note is that the Husband had tried to rely on the earlier case of Rossi v Rossi where it was suggested a 6 year time limit to making a financial application after divorce. HHJ Rodgers stated that this did not articulate an absolute rule of law and the Supreme Court had their chance in the above case of Wyatt v Vince to impose a judge-made limitation period, but did not.

The main points to take away from the above are that there is no statutory time limit after divorce for applying for a financial order in England and Wales. Therefore provided your application is not made in bad law e.g. if you have remarried but are asking for maintenance from your ex-husband; your case will be considered upon the evidence taking into account the usual criteria.

If you are separating, or have divorced but have not concluded your financial position please do not hesitate to contact PMC Family Law. Our team of expert family lawyers are on hand to help you. Get in touch today on 0151 375 9968 or email to arrange your free initial consultation today.

By: Lindsey Potter - Paralegal