Family Law Hub

T v T [2013] EWHC B3 (Fam)

Application by the ex wife for financial remedy 20 years after a maintenance agreement was made but never concluded by an order of the court

  • Neutral Citation Number: [2013] EWHC B3

    Case No. FD94D06840



    Sitting at:

    Watford County Court

    11-19 Station Road

    Watford WD17 1EZ

    Date: Monday, 28th January 2013



    (In Private)


    B E T W E E N :

    T (Petitioner/Respondent)

    - and -

    T (Respondent/Applicant)


    Transcribed by BEVERLEY F. NUNNERY & CO

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    MR. JONATHAN CRYSTAL instructed directly by the Petitioner/Respondent (the wife).

    MR. RICHARD TODD QC (instructed by Withers LLP) appeared on behalf of the Respondent/Applicant (the husband).


    J U D G M E N T


    1. Mr. & Mrs. T were married on 7th September 1985, aged 26 and 24 respectively, and are now in their early 50s. They have one child, "A", now adult, born 1990 and at university. I call them "husband" and "wife" although they are long divorced and he has remarried.

    2. This is the husband's application to show cause why a financial agreement should not be made on order of the court. The wife resists his application. She has applied for a financial remedy and wants a full trial.

    The background to the agreement

    3. The marriage had run into difficulties soon after A was born. In January 1991 there was an unpleasant and reprehensible incident when the parties quarrelled and the husband struck the wife on the arm. The husband did later apologise. The parties instructed solicitors: the wife - Charles Russell, the husband - Farrer & Co, therefore high- end London matrimonial firms.

    4. As the beneficiary of a trust fund the wife was the wealthier party and she had capital, and a significant income from the trust. The husband was at the start of his career, and apart from his pension and his interest in the family properties he had no capital.

    The terms of the agreement

    5. The agreement was signed on 26th June 1991. It had been negotiated between the two firms of solicitors and there had been much correspondence passing between them. It is described as a "Separation Agreement" and in the preamble it is recorded that the marriage had irretrievably broken down. The terms of this recital gave rise to a considerable amount of thought and correspondence. The agreement records that each of the parties had taken separate and independent legal advice and had disclosed to each other their means and other relevant circumstances as set out in schedule A; and that the contents of the home had been divided. It records that the parties had decided to live separately and that at the expiry of two years the wife or, if she did not do so within 26 months, the husband, would present a petition for divorce on the ground of two years' separation with consent, and the other would consent to such divorce. They were to have joint custody of "A" with "care and control" to the wife - this was just in the period of transition into the Children Act 1989 - and the husband would forthwith, on the execution of the agreement, transfer to the wife his legal and beneficial interest in the family home in London. He was also to divest himself of his interest in a jointly owned flat in France. In consideration of taking the family properties the wife was to pay to the husband a sum of £175,000. He was to pay maintenance for "A" at the rate of £2,000; each was to bear half of the cost of private school fees and extras; and all assets standing in their respective names were to remain for their own absolute benefit.

    6. The agreement records that it:

    "... shall be in full and final settlement of each party's actual or potential claims of any financial nature whatsoever against the other or the other's estate, and each covenant that neither will make any claim against the other, or the other's estate, for any financial remedy or relief whether by way of capital or income including, for the avoidance of doubt but not limited to, such claims pursuant to ss.23 and 24 of the Matrimonial Causes Act 1973, s. 11 of the Married Women's Property Act 1882 (in each case as amended and extended) and the Inheritance (Provision for Family and Dependents) Act 1975."

    7. Paragraph 12, and I recite it in its entirety, records that :

    "The husband and wife will invite the court on or as soon as possible after the pronouncement of Decree Nisi in the proceedings for divorce referred to in para. 2 hereof to make an order in the terms of the minutes set out in schedule B hereto, or such other terms as will provide for the dismissal or waiver of all claims which each may have against the other and the other's estate, each is to bear their own costs."

    8. Schedule A sets out their means. There is an initialled handwritten amendment stating the value of one of the properties, and, in a different hand, agreed to be that of Baroness Shackleton (as she now is) who was the lead solicitor acting on behalf of the husband:- "Pension Life Policy values unknown (approx. £250,000)" on the husband's side of the balance sheet. There is another entry in relation to costs which is not initialled.

    9. Schedule B to the order sets out the draft order itself, in three paragraphs:

    (1) Dismissal, as recorded in the agreement, of all claims pursuant to the Matrimonial Causes Act 1973 actual or potential.

    (2) Neither party shall be entitled to apply for an order under s.2 of the Inheritance (Provision For Family Independence) Act 1975; and

    (3) No order as to costs.

    10. It is the husband's case that he exited the marriage with only a very small proportion of the available funds. The wife calculates the division in slightly different proportions and slightly more favourably to the husband. I do not think in the circumstances that it is necessary for me to marry up the husband's case with the wife's, in the light of the authorities in this area of the law, and the lapse of time, and the fairly small difference between them.

    11. For reasons which have been examined, as far as has been possible, in these proceedings, the agreement, now almost 22 years old, has never been made an order of the court. It is not seriously in contention now that both parties have acted on it and complied with its terms save for the making of the order.

    12. Shortly after the parties were divorced, as anticipated in the agreement, in January 1995, and the Decree having been made Absolute in August 1995, the husband married his present wife, by whom he has three children and to whom he is still married. At about the same time the wife bore a child, a son, by another relationship.

    13. The husband has prospered over the years. He was at the very outset of his career at the time of the divorce proceedings. His nascent business interests have grown and his interest in his company is put at over £1.6M: his pension is worth over £1M. He owns his present matrimonial home jointly with his wife: his interest in that and other capital assets he puts at £630,000. His income is around £29, 000 pa.

    14. The wife has not been so fortunate and her capital has reduced: presently put at £970K: mostly tied up in her home where she lives with her son. She earns under £30,000 pa. .She says that she is now in need. I asked Mr. Crystal what she would seek from the husband by way of provision for herself in the financial remedy proceedings He said that she would wish to have periodical payments, not historically, not backdated but ongoing, and for those now to be capitalised.

    These proceedings

    15. A went to university in 2009 and the husband started paying mainentance for her directly. In October 2011 the wife's then solicitors wrote to the husband's solicitors that the maintenance agreement was "never concluded by an order of the court" and sought financial disclosure. On 26 April 2012, the wife, by then in person, issued her application for a financial remedy and her Form A on 26th April 2012. In response, on 14th May 2012, the husband made a conventional "Edgar" or "Crossley" type application to show cause why the agreement should not be made an order of the court.

    16. The matter came before Deputy District Judge Crowther on 25th July 2012. I have been referred to a transcript of that hearing, which is there to be read if this decision needs to be further examined. Mr. Carden, on behalf of the husband, submitted that it was self-evident that the agreement should be made an order of the court and on the basis of his submissions Deputy District Judge Crowther set this matter down before a Judge of the Division in order to deal with the husband's application together with the wife's application for directions. Her Form A was also to be before the court. Mr. Todd submits for the husband, and I agree, that this provision does not imply that the court should automatically proceed to deal with her financial application but was included so that all applications should be before the court; and so that the court would be in a position to dismiss her application, and make the order in terms of the agreement, or any other order, if it thought fit. The husband's counsel agreed to the provision on that basis.

    17. It is apparent that having heard what the case was about, Deputy District Judge Crowther was keen to ensure that this court should have available to it information as to why it was that there had been no court order long since. I imagine that the District Judge had particularly in mind to establish whether there had been any resumption in cohabitation, or any agreement that the order was not to be lodged or that the parties - one or other of them - could review this agreement before the court. She directed that the parties file statements and they have done so.

    18. The wife's is a lengthy document, and it sets out her feelings in very considerable detail. It is obvious that she considers that she was hard done by at the time, and is hard done by now. I agree with Mr. Todd that it is difficult to discern from that statement - I think she was acting in person at the time and I am not criticising her: she clearly feels very strongly about this - a principled attack on the husband's application on the basis of the well-known principles which are set out in the Dean/Edgar line of cases. She also exhibits to her statement a number of documents which emanate from a number of sources, in particular letters written by her to her solicitors, but she has not produced her solicitor's file; neither has the husband.

    19. In contrast to the wife the husband has endeavoured to set out his reasons why the order was not made an order of the court or even submitted to the court. He says that copies of the agreement were in each parties' possession, they had used as the template for their independent lives and they acted on it. He says that he assumed that the formal step of lodging the order had been attended to by his extremely high- powered solicitors. The terms were set out in their totality in the agreement, and it just simply did not occur to him that to check that this had been done and that he needed to have a copy of the order.

    20. The wife gives no explanation whatsoever.

    The Law

    21. The husband's case is that this agreement should be treated as of: "magnetic importance" (per Crossley [2007] EWCA (Civ) 1491) as being the most important and compelling feature of all the circumstances of the case and of the parties' conduct, and that in any event the wife has delayed for over 20 years in seeking any financial remedy against him. Thus he says that it is too late now for her to seek to put the clock back to re-write history when he has conducted his life and set up his new family on the assumption that everything had been agreed.

    22. The approach to agreements in this jurisdiction is well known, and has recently been reinforced by the House of Lords in Macleod v Macleod [2008] UKPC 64. The simple and overriding proposition is that where a financial remedy application is before the court, the court in every case must consider the s.25 criteria, and no agreement can oust the duty of the court so to do. Nevertheless, the importance of a freely negotiated agreement is of relevance and often of determinative relevance.

    23. The principle was first enunciated in 1975 in Brockwell v Brockwell [1975] CAT 468 where Ormrod LJ said:

    "But it must be a matter entirely for the judge to look at all the facts and the financial situation of each party and taking into account the fact that they made this agreement which to my mind is a very important piece of conduct under section 25 of the Matrimonial Causes Act 1973 because what the court is required to arrive at eventually is such an order as will be just and practicable having regard, among other things, to the conduct of the parties, and clearly when people make an agreement like this it is a very important factor in considering what is the just outcome of the proceedings...what they themselves felt to be fair at the time when they made the agreement and that is as good a guide to justice perhaps as anything."

    24. In Dean v Dean [1978] Fam 161 Bush J reiterated that the court must have regard to s.25 of the Matrimonial Causes Act, but also to:

    "Conduct of the parties in all the circumstances ... (which) must include the fact of and the nature of an agreement voluntarily arrived at by the parties."

    25. In Dean the wife said that she had not got a good bargain. Bush J said, as later echoed by the House of Lords in Macleod, that:

    "What is or is not a good bargain does not depend entirely on the financial aspects, other considerations may apply."

    He then gave a number of different examples.

    26. In Edgar v Edgar [1981] WLR 1410 Ormrod LJ referred to Brockwell, and to s.25 MCA 1973:

    "It is the duty of the court to have regard to all the circumstances of the case, and, in particular, to the matters detailed in paragraphs (a) to (g)."

    27. Ormrod LJ said that it was necessary, in order to decide what weight should be given to a prior agreement in order to reach a just result, to look at: (a) conduct leading up to the agreement, (b) the parties' subsequent conduct. He said that it was not appropriate to think in formal legal terms such as misrepresentation or estoppel. The human relations between the parties must be considered. He referred to:

    "Undue pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, an important change of circumstances, unforeseen or overlooked at the time of making the agreement, are all relevant to the question of justice between the parties. Important too is the general proposition that formal agreements, properly and fairly arrived at with competent legal advice, should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement. There may well be other considerations which affect the justice of this case; the above list is not intended to be an exclusive catalogue."

    28. In X v X (Y and Z Intervening) [2002] 1FLR 508 Munby J (as he then was) said that an agreement between the parties was a very important factor in considering what a just and fair outcome was. The court would not lightly permit parties to an agreement to depart from it and a formal agreement properly and fairly arrived at with competent legal advice should be upheld unless there was good and substantial ground for concluding that an injustice would be done by holding the parties to it. The court, however, must have regard to all the circumstances, in particular the circumstances surrounding the making of the agreement, the extent to which the parties themselves attached importance to it, and the extent to which the parties had acted upon it.

    29. I have referred more than once in citing the authorities to the importance of an agreement as conduct rather than just simply part of all the circumstances of the case. Section 25(2)(g) of the Matrimonial Causes Act 1973 does not specify that conduct to be taken into account should be regarded as reprehensible or be subject to criticism in any way. It is simply the way in which the parties have conducted themselves. I note that as long ago as G v G (Financial Provision) [2002] 2FLR 18 Connell J said that the agreement in that case was:

    "The most important part of the circumstances arising as it does from the conduct of both parties ... Mature adults thought that it was a fair bargain at the time. The husband honoured it for over three years. There was nothing in the wife's conduct which renders it inequitable as a starting point for resolution."

    30. In Smith v MacInerny [1994] 2FLR 1077 Thorpe J (as he then was) said that where there is a pre-existing agreement negotiated between lawyers Edgar:

    "... makes it plain that only in the most exceptional circumstances should the court impose a different solution on the parties."

    31. The approach of the courts of this jurisdiction and, indeed, of the UK to agreements generally has also now been endorsed in Radmacher (Formerly Granatino) v Granatino [2010] UKSC 42.

    32. The wife's case, as set out in her statement, is - amongst other arguments - that it was inherent in the agreement that it was interim only, to be reviewed at the time of the divorce. I note that it is asserted in Mr. Crystal's and the wife's chronological document that Miss Sarah Higgins of Charles Russell advised her that neither party's claims could, in fact, be dismissed until the divorce took place. That, of course, as a statement of law, is correct, but I do not draw from that any conclusion that the wife truly believed that she was entitled to reopen the issue of financial provision, in particular since the divorce was pronounced in 1995, and no steps were taken by her at all then or later to seek alternative provision.

    33. Mr. Crystal did not in fact pursue that argument at the hearing. The wife's case put through him is that at the time of the agreement:

    (1) There was material non-disclosure.

    (2) She was under pressure from the husband because he would not move out of the family home.

    (3) She was bullied by Peter George of Charles Russell into entering into the agreement.

    34. The wife also argues that the husband has not given a satisfactory reason for not ensuring that the agreement was embodied in a court order and suggests that maybe he wanted to preserve his position to make a later application against her.

    35. Mr. Crystal also submits that, as a matter of law, the court is under a duty to scrutinise and compare the parties' present positions before endorsing this now historic agreement by way of a court order. He submits, rightly, that this case is, on its facts, far removed from what Thorpe LJ described as "the paradigm case of Crossley" which was a childless short marriage where each party was very wealthy.

    36. Each party has now produced their own chronology since the hearing. I examine the wife's case with reference to the history from the time that solicitors were instructed in early 1991. Proposals were first made by the wife in a without prejudice letter (to which I have been referred by agreement). Those proposals gave her the lion's share of the capital in return for a clean break, and they were accepted with some alacrity on behalf of the husband the same day. The wife's solicitors then sent out a draft separation agreement, and at that stage her means, it is said, were not disclosed to the other side. for the purposes of this analysis I do not need to decide whether an assertion to me by the husband's legal team that her means were not disclosed until a late stage in the process is correct or not.

    37. From April 1991 onwards the correspondence became open and drafts of the agreement passed between the firms of solicitors. They agreed that the lump sum would be paid on the transfer of the former matrimonial home and the redemption of the mortgage, all of which should be contemporaneous with the husband's vacation of the property.

    38. In June 1991 Farrer & Co, for the first time, sent a list of the husband's assets and liabilities. This did not contain reference to his pension at that time. It is suggested that this was an attempt by the husband to mislead the wife but I decline to draw that conclusion, since this omission was later rectified voluntarily.

    39. In June 1991 the wife wrote to her solicitors that the separation agreement could only go ahead if both parties were fully in accord; she felt that the husband was unhappy about signing up to the agreement, but she wanted to abide by it. It was signed on 26th June and the wife confirmed that in writing to her solicitors two days later.

    40. A week or so before the agreement was signed Baroness Shackleton had disclosed the existence of the husband's pension and life assurance in a telephone conversation with Charles Russell and Sarah Higgins wrote to them recording that the husband was to add to his schedule the details about his pension and life assurance policies.

    41. It is the wife's case now that the version that she signed did not have a reference to the husband's pension. I cannot accept that a reputable firm would not have disclosed this information to her. She has not been able to produce any signed document which does not include this inserted reference. I consider that the wife must have known about that, and must have had knowledge of the pension when she signed the agreement. She has known about it for a long time and I am entitled to assume that she knew about it at the time. She has had a copy of the agreement with the reference to the pension inserted ever since it was signed. There has been no previous complaint that she was misled. Even if she did not had not known about it until after the document was signed, its insertion must have been made with her knowledge and agreement.

    42. The wife later instructed Richard Sax of Manches because she wished to relocate to France for tax reasons. Mr. Sax had a copy of the agreement from 1993 onwards. Charles Russell sent the original deed to him in 1994. As a result of Mr. Sax having the agreement the divorce petition was eventually filed

    43. Alongside these financial matters there was also correspondence about contact to A and child maintenance. The agreement was referred to in that and various other different contexts over the years. The French property was not transferred to the wife until sometime in the mid-2000s. The wife's then solicitors, Russell Cooke, asked for a copy of the consent order and this was followed up by a request for a certified copy of the separation deed, of which they had only a copy, which was provided to them. The wife also referred to the separation agreement when she asked the husband to provide a higher level of child support for A. She wrote to that she had read through the separation agreement in November 2002, and she obviously did so with some care because she refers to the date of payment.

    The wife's attack on the agreement

    (i) Material non-disclosure.

    44. I am not sure that I am entirely assisted by cases in which there has been material non-disclosure or change in circumstances where a party wishes to set aside a consent order and to start again, as opposed to where there is an agreement which has not yet been made an order of the court. I accept as a general principle that if there had been material non-disclosure it would certainly highly relevant to the question of whether or not the agreement is overall fair, or whether there had been true agreement. I have already dealt with the question of the pension. But here it cannot possibly be said that the wife was misled as to the existence of the pension and, even if the precise details were not made known to her, she did, in fact, adopt the agreement as her own bargain once the figures were inserted. There are other small matters which relate to the precise value of the properties at different times: they are immaterial. There can be no serious argument absent the question of the pension that the husband was not entirely up front with regard to his means.

    (ii) Pressure by the husband

    45. I do not accept, particularly at this distance in time and considering what has happened since, that the husband's presence in the home exerted undue pressure on this wife. He also was under pressure. He needed capital in order to buy a home. There were already the rumblings of a dispute over contact. No injunctive proceedings were brought against the husband by the wife. There were no complaints in the correspondence that his presence was placing pressure on the wife, indeed, the correspondence makes it clear that the parties' solicitors were ad idem that the husband should remain until the lump sum was forthcoming.

    (iii) Pressure by her solicitors

    46. The wife has complained about the attitude of Mr. George to her and his treatment of her and asserts pressure by him but the correspondence shows that she was concerned about the recital and not about the financial arrangements. Plainly she was happy with other members of the firm. She had no problem with Lady Browne-Wilkinson, who was also acting for her, or Sarah Higgins. In any event, pressure by her solicitors is something which does not in any way reflect on the husband. Many solicitors could be seen, in retrospect, when a party comes to reflect upon and perhaps rewrite history in their own minds, as having been very forceful. Perhaps they have been: it is part of their job to be so and to advise their clients robustly with a view to achieving a realistic result and a saving of costs. I observe that only the most clear, obvious and stark example of negligent - probably grossly negligent - legal advice could possibly undermine a consent order, see Harris v Manahan [1997] 1 FLR 205. There is nothing to make me think that the agreement was not fair at the time and that the wife was not competently advised.

    47. In any event the wife has had the opportunity to raise all these matters for many years.

    Why was the agreement not made an order of the court?

    39. The husband's explanation is the only one I have.

    48. Mr. Crystal declined to cross-examine the husband in the absence of his agreement to waive privilege. The husband is not prepared to waive privilege and I accept Mr. Todd's submission that he is under no compulsion so to do. I can draw no inference from that. From the wife, as I have already said, I have no explanation and no material documents at all. It seems to me that what the husband has said is, indeed, a plausible explanation and the most likely.

    49. It has crossed my mind that each of these parties might have feared to wake the sleeping dog. They each had quite a lot to lose if the other party sought to resile from this agreement. If that was the state of mind of either I am not in a position to find it to have been so and they must each have understood this agreement to be binding on them.

    50. I am wholly unpersuaded that the husband failed to instruct his solicitors to lodge the consent order because he wanted to preserve his right to apply as against the wife. There is no suggestion anywhere that this is the case and the fact that he married his wife shortly afterwards thus depriving himself, as Mr. Todd rightly said, of any ability to apply for a financial remedy, seems to me to be compelling evidence against that analysis. I conclude each thought that the agreement was enough to secure their respective positions.

    51. Finally Mr. Crystal submits to me that the court must always scrutinise in detail the parties' current circumstances when deciding whether an agreement should be reflected in an order of the court.

    52. I accept that there is an apparent tension between the Edgar principle, and the requirement that the court should exercise its discretion with proper regard to the s.25 criteria. I note that in Amey v Amey [1992] 2FLR 89 Scott-Baker J (as he then was) said, in the context of whether an agreement which had not been made the subject of a 1973 Act order was binding once one of the parties had died, that:

    "There is no longer a requirement to obtain the court's approval. What the parties intended to do in the present case was to obtain the imprimatur of the court on a clean break agreement so as to avoid the possibility of return at some later date, such as happened in, for example, Edgar ... It cannot therefore be said that the agreement is not effective because it was not considered by the court."

    53. However, in Peacock v Peacock [1991] FCR 121 the Court of Appeal said that:

    "The court has an overriding duty to survey the sufficiency of the proposed consideration and the overall fairness of the orders proposed. Agreements between spouses or ex-spouses to compromise rights to claim capital and/or income are not automatically made the subject of an order even if both parties remain happy with the bargain. Where one party regrets the bargain and disputes its fairness the proper response of the courts is clearly settled by the judgments in Edgar ..."

    54. That dictum was approved in Solsbury v Solsbury [2007] EWCA (Civ) 969. However, in Dinch v Dinch [1987] 2 FLR 162 Oliver LJ stressed that it was the primary duty of the advisers to advise their clients as to the outcome and the order. And in Tommey v Tommey [1993] Fam 15 Balcombe J (as he then was) said that:

    "A judge who is asked to make a consent order cannot be compelled to do so - he is no mere rubber stamp. If he thinks there are matters about which he needs to be more fully informed before he makes the order, he is entitled to make such enquiries and require such evidence to be put before him as he considers necessary. But per contra he is under no obligation to require evidence ..."

    55. And in Pounds v Pounds [1994] 1FLR 775 Waite LJ said that it was the function of the court, whether it was proceeding by consent or after a contested hearing, to be satisfied that the provision fulfilled the criteria laid down by s.25 but:

    "It is clear, however, that this was intended to be an assertion of general principle only, and not to impose on the court the need to scrutinise in detail the financial affairs of [the] parties ..."

    56. Waite LJ went on to consider the Form M1 introduced after Livesey v Jenkins [1985] 1AC 424, which gives the court the basic information which it is enabled to exercise its discretion:

    "... The effect of S 33 A and the Rules and Directions made under it is thus to confine the paternal function of the court when approving financial consent orders to a broad appraisal of the parties' financial circumstances ... It is only if that survey puts the court on inquiry ... that any further investigation is required of the judge before approving the bargain that the spouses have made for themselves."

    57. In Harris v Manahan [1997] 1 FLR 205 Ward LJ agreed, and also said that Balcombe J's approach in Tommey was based on "practical common sense". He said:

    "The realities of life ... are that the District Judges are under immense pressure and that the system only works because of the practitioners' help. I would therefore be very slow to condemn any judge for a failure to see that bad legal advice has been tendered to a party. The statutory duty of the court cannot be ducked but the court is entitled to assume that parties who are sui juris are represented by solicitors who know what they want. Officious inquiry may uncover an injustice, but it is more likely to disturb a delicate negotiation and produce very costly litigation and the recrimination which conciliation is designed to avoid."1

    58. None of the above, of course, undermines the duty of the court to make its own independent assessment, and to consider the s.25 criteria and fairness, and a just result. The exercise that the court conducts is not one of enforcing the agreement but of determining whether an order should be made in the same terms of the agreement. But I consider that the court is under no duty to examine in detail the parties' current financial circumstances in deciding whether the agreement is now fair.

    59. My approach is to ask myself the following:

    (i) Had the parties reached an accord by which they intended to resolve the matrimonial affairs?

    (ii) How have they conducted themselves?

    60. There is no doubt that each of the parties intended to resolve their financial affairs in 1991. The wife's case in reality is that she has been prepared to rely on the agreement, particularly as recently as the transfer of the French property. But she is now in a far worse position than she contemplated at the time and sees it as the duty of her former husband to support her.

    61. This was an agreement which was entered into, intended to be acted upon and acted upon. No doubt there were advantages to both sides. The wife wanted to preserve her capital (and income), the husband wanted a fresh start and a modest home. The parties have acted upon it, relied on it, and gained peace of mind from it, or certainly were entitled to gain peace of mind from it, for over 20 years. In those circumstances the existence of the agreement must be regarded of magnetic importance, notwithstanding that the circumstances of this case are very far removed from those of Crossley, and in those circumstances the court is under no duty to compare their means let alone to make any adjustment.

    62. In my view in this case the overriding factor is the agreement and the importance that each of these parties placed on it. It is not "peripheral" as is submitted on behalf of the wife. The husband remarried, the wife has borne a child who it is not the husband's duty to support. Neither of them has done anything to change the other party's perception as to the importance of the agreement. If the parties had, for instance, lived together, particularly if it had been for a substantial time after entering into the agreement, then this might be a relevant change of circumstance within the formulation of the Edgar principle: see, by way of example, S v S [1994] 2 FLR 228. If the parties had mutually agreed that the agreement was to be cast aside and that they would start again from scratch pursuant to s.25, then that might also be a material change in circumstances. But these parties started fresh, separate lives in reliance upon this agreement and have lived their lives in accordance with it ever since. In any event, it would be impossible in this case to go back to the beginning and to reactivate the wife's application - too much has happened in the meantime.

    63. In the context of this particular case I consider that the delay is in itself, even absent the agreement, of very great importance. From Foster v Foster [1977] 7 FLR 112 through Chaterjee v Chaterjee [1976] 1All ER 719, Chambers v Chambers [1981] FLR 10, Fraser v Fraser [1992] 3FLR 98, S v S [1989] FCR 582 to Rossi v Rossi [2006] EWHC 1482 (Fam) the courts have repeatedly said, both at first instance and on appeal, that where there has been long delay in seeking a financial remedy so as to give the other party the reassurance that there will be no further claim against him or her, this entitles the court to dismiss the application for financial provision.

    64. The husband's wealth now is as a result of post-separation, indeed, post-divorce accrual, and of efforts and the family endeavour to which his present wife, to whom he has been married now for the best part of two decades, has made a full contribution as part of her married life, and in respect of which she would be entitled to claim if there were to be a breakdown of this second marriage.

    65. This is a paradigm case for the court to conclude that the agreement, having been freely entered into at the time, when both parties considered it appropriate, is the most important, indeed, the overriding factor. The length of time which has occurred since the agreement has been made secures the agreement rather than undermining it, since it was never treated as a nullity or as redundant.

    66. I have regard to the parties' brief statement of their means in the Forms E which each has filed, and it is correct that the husband, as I have said, is in a far better position than the wife, although she is not entirely without capital. What has led to the diminution of that capital I do not know, and I do not think it matters, because the basis of the agreement, each going their own separate ways, meant that each was entitled to do as they wished with what was allotted to them (or what they allotted to each other) by the agreement, and there were no expectations that any change in position would enable the court to look at this matter again. In these circumstances the wife has not shown cause why the agreement should not be made an order of the court, I reject her application for financial provision and I accede to the husband's application to have the draft order made an order of the court.

    L A T E R:

    67. I take the view that these proceedings are not financial remedy proceedings of the normal nature to which the no order as to costs rule would apply. These are discrete proceedings. The rationale behind the principle that there is no order for costs usually in financial remedy proceedings is that each party has an interest in determining how the matrimonial assets should be divided or allocated, and each is usually in a position to meet costs out of his/her allotted share. There are, of course, exceptions, particularly hardship.

    68. Mr. Crystal submits that it is the husband's fault and responsibility that he did not have the consent order lodged and that, by analogy, this is a form of contributory negligence, so to speak, which means that he should not be entitled to seek costs against the wife. Mr. Crystal says that the husband had as much of an interest as the wife in having this matter adjudicated. I do not accept that analysis. Had the matter been attended to as it should have been in the mid-1990s I assume that the consent order would have been lodged. It was open to the wife with legal advice now to accept that the consent order intended, as I have already said, to be acted upon and treated as the template of this separation and should be made an order of the court now. These proceedings did not have to be litigated; they were litigated because the wife wished to make an application which the husband resisted. In those circumstances, just as an application to set aside the consent order is treated as a discrete form of proceedings which is not subject to the usual principle, this is a form of application in which normally costs should follow the event, and I therefore treat the 'events' as being the cross-applications where the husband has succeeded and the wife has failed so, in principle, the husband is entitled to his costs.

    69. The application is governed by s.28(3)(7) and, in particular, the relevant provisions which I need to apply are s. 28(3)(7):

    "(c) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

    (d) the manner in which a party has pursued or responded to the application or a particular allegation or issue."

    which I think together are relevant to the manner in which I have determined the merits of the wife's claim: she did not have to bring this application; and

    "(e) any other aspect of a party's conduct in relation to proceedings which the court considers relevant."

    Which for the purposes of this application, is not something I need to consider.

    70. The matter which gives me cause for thought and for reflection is the financial effect on the parties of any costs order. I have heard submissions that it will cause the wife hardship if I make an order for costs, so Mr. Todd, I need to ask you, have you let me have a schedule of costs?

    MR. TODD: My Lady, yes, it is in bundle A, at p.218. There is the schedule which is extracted from the husband's Form Es. That is the capital position of the wife and husband in respect of the undue hardship argument because, of course, there is a reverse hardship. The wife's position is £970,000. The husband has to his name £633,000 plus, of course, his interests in pensions.

    MRS. JUSTICE PARKER: And the business.

    MR. TODD: And the business, quite, exactly.

    MRS. JUSTICE PARKER: Which is the major asset, is it not?

    MR. TODD: It is, it is, indeed, but of course that means that he does not then have an income if he loses ----

    MRS. JUSTICE PARKER: Yes, and the costs are?

    MR. TODD: My Lady, the costs of the Form A, which was filed on the last occasion, which is bundle E, are £74,734. We have not seen the wife's schedule of costs of the last hearing. As of July it was £48,000. So, one imagines, bearing in mind that the bulk of our costs have been incurred since that July hearing, the same has probably been true of the wife. So we say those are the cost and if your Lordship were minded to assess those today they are at p.173 to p174 in bundle E. We appreciate that this is over one day and so ordinarily you would not be assessing them today, you simply send them for detailed assessment.

    MRS. JUSTICE PARKER: Yes, well, it seems to me in a case of this nature we need to have a detailed assessment.

    MR. TODD: Yes, certainly, my Lady, and we are not surprised to hear that at all.

    MRS. JUSTICE PARKER: Mr. Crystal, is there anything else you want to say to me about hardship?

    MR. CRYSTAL: I have been handed two notes by Mrs. T, as you have probably seen. What she says is that she has no money in her account. You have seen from her Form E in any event the medical difficulties that she has and the threat to her employment. She is a music teacher and she has ----

    MRS. JUSTICE PARKER: But she has the best part of £1 million?

    MR. CRYSTAL: Well, she has a property, but that is where she lives, obviously, with Mr. T's daughter. The other note that I was handed up - Mrs. T said that she had to borrow the money from her mother to get the train here today. Can I just draw one other matter to your attention? Mrs. T correctly reminded me that she offered mediation on two occasions and Mr. T refused. So, it may have been resolvable at ADR, I am not saying it would have been, but experience suggests that these things sometimes can be, and I know we have gone past the conduct of the parties in the course of the proceedings. The husband has declined to avoid a contested hearing.

    MR. TODD: My Lady, I am very happy to reply to that. It certainly cannot be said, in an agreement case where the agreement has been upheld the husband has failed to enter into any sort of mediation. Within the context of this application it is right that an application, having already been issued, the wife wrote to Withers saying: "Will they agree to mediation?" and the reply came back saying: "We already have. We have an agreement in this case" and we wrote back - it is at p.60 in bundle E - saying: "We have set out our position and we are very comfortable with that position".

    MRS. JUSTICE PARKER: Yes, thank you, Mr. Todd.

    71. Mediation is a very useful tool in the box of resolving disputes between parties, but I do not think a party who considers that an application made against him or her is wholly unreasonable is to be forced into mediation, which would have been fruitless, it seems, in any event because the husband would no doubt have stuck to his guns as I found he was entitled to do. I do not think that the husband's refusal to disclose the correspondence between himself and Farrer & Co and the attendance notes and so on, is conduct which ought to be reflected in costs. I think in the light of my approach to this case that really whatever had been the motivation of either party, unless they had come to a mutual agreement to start again, would have made the slightest difference to my decision.

    72. I understand that the wife has no liquid capital but she is capital rich, and she chose to bring this application so I am afraid she must pay the costs on a standard basis, but subject to a detailed assessment.


    1 In Hamilton v Hamilton [2013] EWCA Civ 13 Baron J said at [29] that "the modern approach is that the court endeavours to give effect to fair agreements reached by the parties with the assistance of proper legal advice. In practice most cases settle and the bulk of agreements reached will fall to be approved by the Court (as happened in this case) as a piece of box work by a District Judge. In this event, save for the necessary forms and draft order, the court will have little information as to the objective or the true underlying structure of the deal. In contrast, if a case is settled at a Financial Dispute Resolution hearing, then the Judge may well have a direct input with the result that the essential causal matrix of the agreement will be known and understood."

Judgment, published: 15/04/2013


See also

  • Application by the ex wife for financial remedy 20 years after a maintenance agreement was made but never concluded by an order of the court Case note, 17/05/2013, members only

Published: 15/04/2013


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