UK: Making Financial Claims Long After A Divorce

Last Updated: 13 April 2017
Article by Will MacFarlane

There have been a number of recently reported cases in which the family courts have assessed financial claims brought many years after divorce. The Court of Appeal's decision in Briers v Briers [2017] Civ 15 is one such example, which serves as a cautionary tale for separating couples who decide to leave their financial affairs unresolved.

Background

Mr and Mrs Briers were married in 1984 but separated in 2002. A divorce decree was pronounced in 2004 but crucially, no financial agreement was ever signed or approved by the Court.

They were both teachers when, in 1988, Mr Briers set up a sportswear business from their garage. At incorporation, he held 99% of the shares and his wife 1%. In 1990, he gave up teaching to concentrate on the business full-time while his wife continued to teach and to focus on bringing up their children (as well as helping out with the fledgling business). Two years after divorce, the former husband paid his former wife a lump sum of £150,000 and by then he had also transferred the family home to her. Finally, in 2008, she transferred her share of the business to him and to his mind that was their final agreement. She went on to form a long term relationship with another man.

Following the breakdown of this subsequent relationship, Mrs Briers made an application for financial provision, by that time 11 years after separation and 9 years after divorce. Press reports suggest that the business was by then worth around £30m, quite some increase from the £88 of capital introduced at incorporation. At first instance, the former wife was awarded an additional £2.7m comprising a lump sum of £1.6m, 25% of one of her former husband's pensions and some shares.

The Court of Appeal's ruling rejecting Mr Briers' appeal was reported in January and widely covered by the press.

Issues

The case presents a particular factual matrix, likened by our professional support lawyers to a 'perfect exam question', allowing the Court of Appeal to address a number of thorny questions which arise frequently, but rarely in the same case.

  1. What constitutes an enforceable and binding agreement? (Mr Briers thought he had reached one which he had then implemented on divorce. Why didn't that count?)

Mr Briers tried to assert that an agreement had been reached in 2005. The Judgment notes that on cross-examination Mrs Briers agreed that she thought a deal had been done. However, the Court of Appeal found that her agreement was conditional upon his providing full and frank financial disclosure. Without this, there was no deal.

Neither party claimed that an agreement had been signed but signature is only one aspect of a concluded agreement. What the Court of Appeal stressed was the importance of full and frank disclosure – another important theme recurring in case law at present. For example, Mr Justice Moor's decision in Thakar v Thakar [2017] EWFC 13 cited the husband's non-disclosure when finding that a company structure was beneficially his and held for him by his mother and sister as nominees, opening the way for the wife to pursue her financial claims against him.

Despite Mrs Briers conceding that there may have been an agreement, the Judge at first instance found that she had felt bullied and intimidated by her former husband. Her requests for financial disclosure had been ignored, vitiating any consent that she may have given.

The Court of Appeal also noted that Mr Briers had not been open about his financial arrangements, describing one property he lived in as rented when it was, in fact, owned by him. This undermined his credibility in the eyes of the court, and he compounded matters when he refused to acknowledge instructing a solicitor when the documents clearly demonstrated that he had done so. It is impossible to quantify the effect of this in monetary terms but it certainly had a detrimental effect. The importance of parties providing financial disclosure cannot be overstated. Without it, the financially weaker party cannot know what rights he or she may be waiving and a court may refuse to uphold an agreement.

  1. Why didn't the receipt of a lump sum, the transfer of the house and a ten year delay preclude Mrs Briers from making further claims? (Mr Briers assumed it would. Not only had they been divorced for nearly a decade, Mrs Briers had subsequently formed a cohabiting long-term relationship with another man).

The judgment follows the approach set out by the Supreme Court in Wyatt v Vince in 2016, stating that delay is one of the factors in the court's assessment but it does not act as a bar to or even as a limit to a full claim for financial provision.

The judgment alludes to Mr Briers' arguments that his former wife's claims should be limited by her subsequent relationship, which had ended by the time of her application. The Court of Appeal and first instance Judge both acknowledged that had her subsequent relationship ended differently, she may not have made her application but decided that this had no bearing on the shelf-life of her claims. Had Mrs Briers remarried, the situation would have been different as her financial claims would have fallen away.

  1. Mr Briers had built up the business in the 11 years since separation to an enterprise worth around £30m. Having had no involvement for over a decade, why did Mrs Briers have any right to share in this? (Mr Briers thought she shouldn't but both the Judge at first instance and the Court of Appeal disagreed).

The House of Lords' decision in White v White in 2000 confirmed the equally important contributions of both homemaker and breadwinner, a principle which the Court of Appeal applied in this case; while Mrs Briers had played no part in the business following separation, her contribution in bringing up the children was equal but different to that of Mr Briers. As to the company, it had been created during the marriage and benefitted from contributions (whether financial or non-financial) from both spouses. Citing Mrs Justice Roberts's decision in Cooper Hohn v Hohn (a case in which Withers acted), the Judge at first instance viewed the company as an undivided matrimonial asset. In effect, the former husband had been trading on his former wife's share and each of them was at risk if it failed. For that reason, she was entitled to a share in the post-separation uplift in value, albeit a reduced share given the delay.

Wider Implications

Decree Absolute concludes a divorce but unless a financial Consent Order is signed by both parties and approved by a court, there is always a risk that either party could apply for financial provision from the other. Aside from a potential applicant remarrying in the interim which would preclude a court application, neither significant delay nor cohabitation with a new partner will act as a bar on financial claims being made.

The experience of divorce is often likened to suffering a bereavement. As such, it is not uncommon for couples to avoid contemplating difficult questions including the conclusion of a binding financial settlement. Cases such as Briers and Wyatt v Vince act as a stark warning to parties about the dangers of leaving the finances unresolved or undocumented. Instructing specialist family lawyers to prepare a legally binding agreement approved by the Court would avoid the acrimony and expense of financial claims in the future.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions