- Consent Orders arising in Financial Remedy proceedings are often implemented years after they are made. The parties’ circumstances can change between the making of an Order and the implementation of it, memories fade, relationships change and parties may reflect on the agreement at the time and wish to renege on it.
- I recently dealt with a case where a Financial Remedy Order was being implemented some 16 years after it was made. The Court was appraised of an application to set aside the Order on grounds of fraud suggesting the other party had fraudulently signed the other’s signature on multiple documents.
- It was a very bold accusation to make and one of the most serious allegations a party can face in Family Proceedings. If proved, criminal proceedings may follow and the fraudster’s liberties may well be at stake.
- It is important however to bear in mind the purpose of the application within the context of Family Proceedings. The purpose is to set aside the Order and invite the Court to revisit and re-determine the initial application for Financial Remedy.
- The Supreme Court dealt with a similar issue back in 2015. In the case of Sharland v Sharland (2015) UKSC 60 the court observed the following:
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- Family proceedings differ from ordinary civil proceedings in two respects: a consent order derives its authority from the court and not from the consent of the parties and the duty of full and frank disclosure always arises [27].
- The consent of the parties must be valid. If there is a reason which vitiates a party’s consent there may also be good reason for the court to set aside a consent order. Whether the court is bound to do so is the question arising on the appeal [29]
- The only exception is where the court is satisfied that, at the time when it made the consent order, the fraud would not have influenced a reasonable person to agree to it, nor, had it known then what it knows now, would the court have made a significantly different order, whether or not the parties had agreed to it. But in my view, the burden of satisfying the court of that must lie with the perpetrator of the fraud. It was wrong in this case to place upon the victim the burden of showing that it would have made a difference…” [33]
- The High Court in Silberschmidt v Richards [2025] EWHC 2841 (Fam) – (80) concluded that; An applicant seeking to set aside a financial remedy consent order on the ground of fraudulent non-disclosure ‘must act with reasonable promptness in making the application’. The court must determine whether a lack of reasonable promptness should defeat the application.
- In its assessment of whether an applicant has acted with reasonable promptness, the Court must consider all the relevant facts and circumstances in the case.
- The relevant facts and circumstances include a consideration of subjective and objective factors, which include:
- the nature, extent and effect of the fraudulent conduct;
- consideration of what information was available to the applicant (what they knew or could have known with reasonable diligence);
- the period of delay; and
- the impact of delay on the other party, on the fairness of any hearing of the application, and on the administration of justice.
- The relevant facts and circumstances include those over the whole relevant period before and after information came to light.
- Pulling all the strands together, it is clear that any application to set aside an Order on the grounds of fraud/fraudulent non-disclosure must be made promptly. Failure to do so is a ground to defeat the application in itself irrespective of whether fraud is proved. This particular ground may prove a useful argument when seeking to defend applications to set aside on this ground.
- In any event, even if fraud is made out, not all is lost. Whilst it is expected in the majority of circumstances, the Court will set aside the Order, the Court in Sharland identified circumstances in which the Order could, notwithstanding fraudulent non-disclosure being made out, remain as drafted and be enforced. The fraud/fraudulent non-disclosure may be immaterial if the Court can be satisfied the Court would not have made a “significantly different order”. In that event, the perpetrator of the fraud carries the burden, on the balance of probabilities, of proving it would not have made any material difference. How that burden is discharged will vary from case to case but primary evidence of the value of the assets at the time and application of the criteria under S25 Matrimonial Causes Act 1973 retrospectively may be sufficient.
- Primary evidence is highly likely to be required. It is unlikely a Court will simply take the perpetrator of the fraud’s word for the value of the assets (given their credibility) and the extent to which primary evidence is available sometimes years after the consent order was made may be unobtainable. Early advice as to the type of evidence that is available and from what source is essential in order to defend any application irrespective of whether the defendant is confident fraud cannot be made out. It is imperative for both defences to be advanced simultaneously.
- Equally, when acting for the applicant, whilst not carrying the burden of proving the fraud would have made a material difference, it nevertheless remains necessary for evidence to be adduced to provide the Court with some evidence to conclude the fraud was material. That inevitably makes the Defendant’s job of proving it would not have made a material difference much more difficult.
- Equally, each party has to be confident in the case they seek to advance. There is an important distinction to draw between Financial Remedy Proceedings and Proceedings for a Financial Remedy, the latter being more civil in its nature and attracting the starting point of costs following the event. These types of Proceedings for a Financial Remedy often attract significant costs and applying CPR 44.2, it is highly likely the unsuccessful party will be responsible for some, or all, of the other’s costs. Strategic discussions are therefore essential to ensure costs are incurred proportionately and whether negotiations to settle the case are more cost effective.
- Whilst these types of cases are relatively rare, they are often complex and, at times, are determined almost entirely by the credibility of the parties who are giving evidence about matters that took place years ago. Moreover, the prospect of revisiting an Order that was made (sometimes) years ago is a daunting prospect for the parties particularly when they considered their divorce had already been resolved.
- Proper and effective pleadings are required having due regard to Counsel’s obligation under the BSB code of conduct that fraud must not be pleaded without reasonably credible evidence. Obtaining that evidence is therefore critical and early consideration of the likely evidence available or evidence that is required (such as handwriting experts) is key to preparing an effective case/defence as is exploration of less intrusive ways of resolving the dispute such as ADR, arbitration, mediation or similar, particularly given the likely costs implications for the unsuccessful party.
For more information about about family finance team please contact clerks@becket-chambers.co.uk
