In the case of Wyatt v Vince  UKSC 14, the Supreme Court ruled that the wife’s claim was not an abuse of process and her application should not be struck out. The appeal was allowed and the wife’s application was directed to proceed in the Family Division of the High Court.
The appellant, Ms Wyatt, and the respondent, Mr Vince, married on 18th December 1981. Ms Wyatt had a daughter from a previous relationship who was treated as a child of the family and the couple had a son together. Ms Wyatt brought up the children in circumstances of financial hardship and at the time Mr Vince was not in a position to make any substantial financial contributions for them. The couple divorced and the decree absolute was granted on 26th October 1992. The court file, for the divorce proceedings had been mislaid and it is unknown what, if any, order was made at the time regarding financial provision but the court had no reason to believe that Ms Wyatt’s claims were dismissed. Ms Wyatt went on to have two more children long after her separation from Mr Vince by a man who never maintained them.
Following the breakdown of the marriage, Mr Vince became the sole shareholder of Ecotricity Group ltd, a company which provides green electricity to at least 70,000 homes and businesses in the UK. The value of his company is at least £57m. He currently lives with his second wife and son from previous marriage with Ms Wyatt.
In 2011 Ms Wyatt made an application for financial provision in the form of a lump sum. She also applied for interim payments to fund her legal costs. Mr Vince cross applied for Ms Wyatt’s application to be struck out pursuant to 4.4 of the Family Procedure Rules 2010 which provides;
‘(1)…. the court may strike out a statement of case if it appears to the court –
a) that the statement of case discloses no reasonable grounds for bringing or defending the application;
b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings…’
On 14 December 2012, Mr Vince’s strike out application was dismissed by a deputy High Court, he was ordered to make interim periodical payments in respect of legal costs directly to Ms Wyatt’s solicitors. Mr Vince appealed successfully to the Court of Appeal to have the orders set aside. Ms Wyatt’s application for financial provision was struck out by the Court of Appeal and she was ordered to repay part of the money. Ms Wyatt appealed to the Supreme Court.
Reasons for judgment
The Supreme Court examined the jurisdiction under Rule 4.4 of the family rules to strike out Ms Wyatt’s application for a financial order. It can be inferred that references to ‘no reasonable grounds’ and ‘abuse of the court’s process’ in Rule 4.4 are intended to bear the same meaning as the equivalently worded strike out provisions in the Civil Procedure Rules which allows the court to give summary judgment on the basis that the claimant or defendant has no real prospect of success and there is no other compelling reason why the case should be disposed of at trial. However, there is no equivalent power of summary judgment in the family rules.
When an ex- spouse applies for a financial order, the court has a duty under section 25(1) of the Matrimonial Causes Act 1973 to determine the application having regard to all circumstances. The Court of Appeal were therefore wrong to insinuate a test to summary judgment in family cases. Ms Wyatt’s application was therefore legally recognisable and is not an abuse of process and her appeal against the strike out therefore succeeded.
Lord Wilson considered section 25(2)(f) of the 1973 Act, which refers to ‘the contributions which each of the parties has made to the welfare of the family, including any contribution by looking after the home or caring for the family.’ Ms Wyatt relied upon her much greater contribution to the upbringing of the couple’s children over many years, a factor which justified a financial order for a comparatively modest sum.
This landmark case illustrates the importance of obtaining proper legal advice and ensuring that at the time of the divorce the parties obtain a binding court order dealing with the division of assets.
How can you protect your finances on divorce?
A consent order can be made by the court when financial issues are agreed by the parties to a divorce. The agreement between the parties is given legal effect by asking the court to make an order by consent. If no order is made, the financial ties and obligations of marriage will continue notwithstanding the marriage having been dissolved. This could result in a former spouse making financial claims long after the divorce, and on your estate after death.
To obtain a consent order both parties disclose their financial situations to each other, and an agreement as to the finances is negotiated between the parties. This agreement is then submitted to the court for approval, and once approved becomes a legally binding document. As well as submitting the agreement to the court, you must also send a statement of information which summaries the parties finance.
Where the parties cannot reach an agreement, either party can make an application to the court for a final order. They will have to prepare a full and frank disclosure of their income and outgoings. Court proceedings can be complicated, time consuming and expensive.
Both types of court orders (if they provide for a clean break between the parties) will prevent an ex-spouse in the future from making a court application against you should your financial situation improve.
A financial order can be made at any time after decree nisi, however some parts of the order, for example property adjustment or a lump sum payment cannot take effect until decree absolute.
Whilst a court order as to the finances of the marriage may not seem necessary at the time of divorce, the need for one may arise in the future should the financial situation of either of the parties change. This could leave you facing a claim by an ex-partner as to a share in any financial gain you make.
If you require further information on asset protection, division of financial assets upon divorce, or financial orders in general, please contact our private family law department then there is further information available here. Alternatively please contact us to speak to one of the solicitors in our private family law department here.
By Nusrat Chauhan