Usually when a former couple is going through financial negotiations or litigation after divorce, the finishing post is the sealing by the court of the order setting out their financial arrangements. Once the ink on the court stamp is dry, all that normally follows is to put its terms into effect, and the family can move on from the stress of sorting out their financial arrangements towards a more certain future.
However there are limited circumstances in which it is possible to undo the sealed order, and ask the court to consider matters again. We are not talking about appeals here (which can be made in limited circumstances where you consider a judge to have been wrong in the way he or she applied the law or on the facts of your case), rather we are looking at when it is possible to set aside an order because of an unexpected revelation or change in circumstances. This doesn’t happen often, but two recent cases have highlighted situations where it did.
A court can set aside a completed financial order on divorce where one side has lied about their financial disclosure, or on oath, to the extent that a different order would have been agreed or imposed had they been truthful. If their non-disclosure undermines the principles on which the order was based, then a court is likely to reopen the case.
In a recent case, a financial consent order on divorce was set aside due to the husband’s non-disclosure. In this case, the agreement provided for the family home to be transferred to the wife along with a lump sum of £4 million in instalments over 8 years, and the husband also agreed to pay child maintenance of £10,000 per annum for each of their three children, who remained predominantly with the wife. The husband had disclosed that there was a trust set up by his family for the benefit of the children. Sometime in 2014 the wife discovered that this trust was actually for the benefit of the husband rather than the children, and in fact he had received over £9 million from the trust since the divorce. So, as the wife had returned the matter to court promptly and the non-disclosure was significant, the consent order they had negotiated was set aside. This means they will be back to square one and have to negotiate or litigate afresh, but in the knowledge that the husband has significantly more resources than he previously admitted to.
The second reason for setting aside a final order is where there has been a significant, unforeseen, circumstance-changing event that comprehensively undermines the order. The change needs to be a major one, so market fluctuations in the value of assets are not enough. The remarriage of one person shortly after the order might be enough to undermine an order, but only if that party misled the court about their intentions at the time.
A tragic recent case has demonstrated that the death of a party shortly after the order is sealed can cause the court to reconsider the case. In this case, the wife was an extremely wealthy heiress, and the couple signed a pre-nup before they married which prevented them making claims against each other on divorce. The family lived on a very large estate worth in the region of £30 million and had three children.
When the marriage broke down after 17 years, the parties largely ignored the pre-nuptial agreement and negotiated a financial settlement where the wife would make a lump sum payment to the husband of £17.34million. The payment was to be paid in two tranches of £8.67million. The first was paid, but 22 days after the making of the order, the husband committed suicide. His will left his entire estate to his three adult brothers.
The wife then returned the matter to court saying the husband’s death invalidated the basis of the consent order. She wanted all the money returned. The judge agreed that as the payment to the husband had been to meet his needs, the court could look at the matter afresh in the light of the unforeseen change of circumstances – his death – and take a new view on what was fair.
If the court had known at the time that the husband would die within a month of the order being mad, the judge considered that the sum of £5million would have been appropriate to meet both his needs and an element of sharing of the marital wealth. This sum was substituted for the initial sum of £17.34million, and the three brothers lost out.
These cases demonstrate the narrow band of circumstances in which courts will reconsider financial settlements after they have been sealed by the court. If you would like to speak to Gail, Sue, Tricia, Simon or Adam about reopening orders, or any other aspect of family law, please give us a call on 01223 443333 to make an appointment.