Blog: Is It Always Necessary To Obtain Final Financial Orders Even In “No Money” Cases? Or “What If I Ever Win The National Lottery (Or Build Up A Multi Million Pound Eco-Company)?”

The Supreme Court’s decision in the case of Wyatt v Vince [2015] UKSC14 is of vital importance to divorcing, and divorced, couples underlining the need always to obtain final settlement orders with respect to the financial claims which arise from a marriage.    It is a real problem for many people with the unavailability of legal aid and the difficulty in affording legal advice or representation and many couples might feel that it is all too easy to agree matters informally or not at all particularly if they have limited assets or income.    This recent case emphasises the enormous risks that can result from not obtaining final orders where possible.

The Facts of the Case

The Appellant, Ms Wyatt, and the Respondent, Mr Vince, were married in December 1981 when she was 21 and he was 19. They had a son, and Mr Vince also treated Ms Wyatt’s daughter from a previous relationship as a child of the family. They separated in 1984.   For a number of years after that, Mr Vince pursued an unconventional “travelling” lifestyle.   Ms Wyatt brought up the children in a parlous situation, with little if any proper financial support from Mr Vince.   They divorced and their decree absolute was granted in October 1992.   Seemingly the court file had been lost 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.   From the late 1990s Mr Vince’s green energy business took off and is now valued at approximately £57million. He lived with his second wife, their child and he is a multi-millionaire.    In 2001, the couple’s son went to live with Mr Vince.   Ms Wyatt’s financial circumstances continued to be very modest.   She was now in poor health, her home, which was subject to a mortgage, was in a state of disrepair and her three adult children all lived with her.    At times she was reliant on state benefits and the children made only modest contributions to the household finances.

In 2011 Ms Wyatt made an application in the divorce proceedings 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 substantive application to be struck out pursuant to Rule 4.4 of the Family Procedure Rules 2010 (“the family rules”), 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 14th December 2012 a deputy High Court Judge dismissed Mr Vince’s strike-out application and ordered him to make interim periodical payments in respect of legal costs directly to Ms Wyatt’s solicitors (“the costs allowance order”).   Mr Vince appealed, successfully, to the Court of Appeal to have the deputy judge’s orders set aside.    The Court of Appeal struck out Ms Wyatt’s application for financial provision and ordered her to repay £36,677 of the £125,000 that the husband had already paid her, that being the amount currently held by her solicitors.   She appealed to the Supreme Court.

Decision

The Supreme Court unanimously allowed the appeal and directed that the wife’s application proceed in the Family Division of the High Court. The deputy judge’s costs allowance order was restored and the Court of Appeal’s repayment order set aside. The Supreme Court observed that the wife’s application faced formidable difficulties, not least of which was the inordinate delay in issuing it.    However, pursuant to section 24(2)(f) of the Matrimonial Causes Act 1973, the court had to have regard to the contributions which each of the parties had made to the welfare of the family, including any contribution by looking after the home or caring for the family.    Such contributions were not limited to those made prior to the separation or even during the marriage. The wife relied upon her care of the two oldest children during their minority, the absence of a significant financial or other contribution to their care by the husband; and, the conditions of poverty in which the wife was constrained to provide care to the children.   Had it been relevant to ask whether the wife’s application had a real prospect of success, the answer would have been that it had a real prospect of comparatively modest success, perhaps of an order which would enable her to purchase a somewhat more comfortable, and mortgage-free, home for herself and her remaining dependents.

Reasons for the judgment


The Supreme Court decided that the Court of Appeal was wrong to insinuate a test analogous to summary judgment into the family rules. Both limbs of Rule 4.4 should be construed without reference to real prospects of success.    An application has “no reasonable grounds” for the purposes of Rule 4.4(1) (a) only if it is not legally recognisable, e.g. because there has already been a final determination of the proceedings or because the applicant has remarried.   Neither should an application be viewed as an “abuse of process” falling within Rule 4.4(1)(b) solely on the basis that it has no real prospect of success.   Ms Wyatt’s application is legally recognisable and is not an abuse of process and her appeal against the strike-out therefore succeeded.

The court also considered the costs allowance order.   Mr Vince argued that even if Ms Wyatt’s application were not to be struck out, the deputy Judge had been wrong to make the costs allowance order. The threshold test for making such an order was whether Ms Wyatt could reasonably secure legal services by any other means. Given that it would be unreasonable to expect her solicitors to continue to act without payment until the determination of her substantive application this test was satisfied.

Conclusion

What this case does is make it clear beyond doubt, that it is extremely risky not to obtain orders in divorce proceedings which finalise any financial settlement. Where couples do not do so they face the prospect of claims arising in the future, perhaps many years after the divorce, which will not be stopped by the court and which may well succeed.   Even if such a future claim might ultimately be unsuccessful or only modestly successful, the person against whom it is made faces the stress and hassle and considerable cost of dealing with the proceedings   Whilst at the moment there might seem to be  no reason to make a claim, reasons might arise, such as business success like Mr Vince’s, a large inheritance or win on the National Lottery that make a claim  an attractive proposition for the erstwhile spouse.   It is clearly inadvisable not to obtain final orders even if those orders are just dismissal orders and “clean breaks orders” to avoid the problems that Mr Vince now finds himself in, not least with what must be an enormous legal bill.