A Judgement of the Court of Appeal is a timely reminder that people who divorce should conclude their financial arrangements, or run the risk of finding they have to pay out substantial sums to a former spouse many years later.
Summary of the case
Mr and Mrs Briers were married in 1984; they separated in 2002 and divorced in 2005. No orders were made to settle their financial affairs and, in 2013, Mrs Briers pursued her financial claims arising from the marriage.
Mr Briers argued that the parties had reached an agreement in 2005 or, if the Court decided there was no agreement, that Mrs Briers’ claim was made too late and that she should not share in the, post-separation, increase in the value of the sportswear business run by Mr Briers, which was substantial.
The Court of Appeal disagreed and awarded Mrs Briers a lump sum of £1.6million which, together with other assets, brought the overall award up to in excess of £2.5million.
Reference to an earlier case
In giving judgement, the Court referred to the earlier case of Vince and Wyatt (the wind farm millionaire case). Whilst acknowledging that a substantial delay could reduce or eliminate “the financial provision to which Mrs Briers might otherwise have been entitled”, in this instance, the Court decided that she should receive approximately 30% of the overall assets, concluding that they had to have regard to all the circumstances of the case, of which the delay was only one factor.
Essentially, the Court made clear that each case turns on its facts and that unless there is a concluded agreement, either by a valid Separation Agreement or Order of the Court, then a former spouse is entitled to pursue a claim many years after divorce.
The only proviso to this is that a party may be caught by what is called the remarriage trap, essentially unless a party has given the Court notice that they intend to pursue claims (usually done by the person seeking the divorce within the Petition) they may be caught by the remarriage trap. This can catch out the uninformed Respondent who may not be able to pursue claims that otherwise they might, in the event of them having remarried.
The Briers’ case
Although the Court acknowledged that Mrs Briers’ needs were already met – the family home had been transferred to her after separation and Mr Briers had implemented what he claimed were the terms of separation – the Court concluded that because Mrs Briers had made clear that there would be no agreement without Mr Briers’ providing her with full disclosure of his financial circumstances at the time of separation, which he did not do, there was no agreement. Although Mrs Briers had done nothing to pursue her claims until 2013, the delay was only a factor and not determinative of her rights.
The Court was probably influenced by its conclusion that Mr Briers was the “dominant personality” in the relationship and that his evidence had a “tendency towards unreliability” and that Mrs Briers had “perceived herself as being bullied and intimidated”. By contrast, the Court found that Mrs Briers, who had worked throughout as a teacher as well as caring for the parties’ children, was a credible and reliable witness.
Although the business had increased significantly in value since the parties’ separation and has been had run single handily by Mr Briers over that time, the Court acknowledged that Mrs Briers had taken responsibility for caring for the parties children and had been an important contributor at the infancy of the business.
So, whilst much of the value of the assets was acquired after the divorce, the Court concluded that the business remained a matrimonial asset and that Mrs Briers was entitled to her fair share.
A timely reminder
Parties who fail to reach an agreement which the Courts will recognise as binding after separation run the risk that if their financial circumstances improve, as in this instance, they may face a claim from their former spouse many years later.
If you are in any doubt about the financial impact of divorce or want to consider seeking a financial clean break order, please contact our Family team who would be happy to advise you.