A bitter pill to swallow

Much media attention was generated by the decision of the Supreme Court in the recent case of Wyatt v Vince. Sensationalist newspaper stories proclaimed that ‘the floodgates have opened’ for former wives to make financial claims against their former husbands (and vice versa), even when many years have been and gone from the date of their divorce.

It is important that in the face of the above claims, a reality check is imposed. Firstly, the facts of the case are truly exceptional. Ms Wyatt (whom we will call the wife to keep things simple) and Mr Vince (whom we will call the husband) were married in 1981. They had a rather unconventional (some might say hippy) lifestyle and spent periods of time together and apart. However, in 1992 the wife started divorce proceedings and the divorce was completed at the end of October 1992. It would be fair to say that at that point in time, neither the husband nor the wife had any assets to their name.

There still exists a common misconception that when parties are divorced, the completion of their divorce brings to an end the ability of either party to make financial claims against the other in respect of their marriage. This may be the case in other jurisdictions (and it may appear perfectly logical) but the laws of England and Wales say otherwise. We don’t know whether or not the wife made any financial claims against the husband in her divorce petition. No copy of the petition appears to have survived. However, it actually doesn’t matter. The crucial thing is that the wife did not remarry after the divorce. Her ability to make financial claims against the husband remained live.

It may have been the case that in 1992 there was no money available to either party but the husband fared far better than the wife after their divorce. From very humble beginnings, the husband developed a business specialising in the commercial supply of wind energy and achieved remarkable success. His company, Ecotricity Group Ltd, was valued at over £57m at the time of the recent court proceedings. The wife was not so fortunate and her own assets were extremely modest. However, fortune and fame tend to go hand in hand and in 2011, the wife made an application for financial provision from the husband, including interim payments to fund her legal costs of the application.

The husband was, understandably, less than impressed. A period of over 19 years had passed since their divorce. Why should he have to pay the wife anything when all of his wealth and success had been generated after their marriage came to an end? The husband applied for the wife’s claim to be struck out. The High Court did not agree and they ordered him to pay interim payments to the wife to fund her legal costs. The husband appealed successfully at the Court of Appeal. The wife then appealed herself, this time to the Supreme Court.

The issue that the Supreme Court was asked to consider was not: ‘it is fair for a former spouse to make a financial claim against their former spouse once 19 years have passed since their divorce?’ Instead, it was whether or not the Family Court has the ability to strike out such a claim as amounting to, essentially, an abuse of process because there is no reasonable prospects of success. In simple terms, the Supreme Court was not asked to rule upon the merits of the wife’s case (more of that later) but upon her ability to make a claim in these particular circumstances.

The husband’s case was that in matters such as debt, contract and personal injury cases, the civil Court has the specific power to strike out claims that are without merit. It has the power to give summary judgment against a party where it appears clear that their case stands no realistic prospect of success and it would be unfair for it to proceed to a final or full hearing. Given the facts, the husband suggested that a similar approach should be applied by the Family Court over his wife’s case.

To the surprise of many, the Supreme Court rejected the husband’s case and the view taken by the Court of Appeal. In an unanimous decision, the Supreme Court held that the approach taken by the civil Court was ‘incompatible’ with that of the Family Court. Their view was that the wife’s claim was legally recognisable and any similar claim should not be treated as an abuse of process solely because it has no real prospect of success. The Family Court can certainly strike out an application, but not before its merits have been properly considered. There had been no proper consideration of the wife’s application, so they said.

The husband has described the decision as ridiculous and it is fair to say that many family lawyers (and no doubt many husbands) would agree with him. The wife was no doubt ecstatic at the decision but one imagines that her own legal team will be at pains to emphasise to her the following:

• The Supreme Court described her application as facing ‘formidable difficulties.’
• She has not been awarded anything yet.
• She may not receive anything at all.
• Her suggestion that she was entitled to a sum of £1.9m was described as ‘out of the question.’

The wife’s claim is now set to proceed to a hearing where the parties will be instructed to use their best endeavours to negotiate a settlement without the need for the court to make a final decision. The eventual outcome of this case will be fascinating but in many ways, the extremely unusual facts mean that caution is required. It is a rare case indeed when parties divorce with nothing and 19 years later, one of them turns out to be a multi-millionaire.

It does, however, remain common that when parties divorce, no steps are taken by them to formally resolve financial matters between them. There are, in reality, a number of reasons for this:

• There are no assets available for division.
• The parties ‘trust one another’ and don’t feel it necessary to take formal steps.
• The parties do not obtain legal advice at the time.
• The parties cannot afford to obtain legal advice.
• One party wants to obtain a consent order to resolve matters but the other party does not.

The exact reasons that apply to Ms Wyatt and Mr Vince have not been clearly established; one suspects it was the fact that there was nothing to divide between them in 1992 that is most likely. Neither of them could ever have imagined that the husband would have such amazing success in his future endeavours. Wyatt v Vince is far from an everyday situation for a previously divorced couple. Its facts are unlikely to be repeated on a regular basis. It does, however, serve as a warning and wake-up call for those couples who did not formally resolve financial matters at the time of their divorce. Prevention is usually better than the cure. As Mr Vince is finding out, the cure can be a very bitter pill to swallow.

If you are unsure where you stand after your divorce, get in touch with us.