No time limit to financial claims following divorce - Boodle Hatfield

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24 Mar 2017

No time limit to financial claims following divorce

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The Supreme Court appeal last week by Ms. Wyatt against her ex-husband Dale Vince has received widespread media interest, with reports suggesting a flood of claims from ex-wives lodging financial claims decades after a divorce. 

But what was the basis for the Supreme Court’s decision and what are the implications for potential divorcees?

Dale Vince met Kathleen Wyatt in 1981. They married in 1982 and had one child together in 1983. At the time Ms. Wyatt had a child from a previous relationship, who was, during the brief relationship with Mr. Vince, treated as a child of the family. In 1984 the couple separated.

During their relationship, the couple lived a hand to mouth existence. In the early years following their separation, Mr. Vince continued to have insufficient income to pay child maintenance. Ms. Wyatt continued living on benefits with the children (and later further children from subsequent relationships), long after Mr. Vince started to create his fortune.

In 1992 Ms. Wyatt petitioned for divorce in her local Court. Decree Absolute followed on 10 August 1992. Crucially it seems that the parties did not seek at that time to deal with their financial claims against one another – an omission which Mr. Vince has lived to regret.

Mr. Vince’s first career break came in the 1990s, some six years following the breakdown in his relationship with Ms. Wyatt. He erected a self-made wind-powered phone service for the use of festival-goers at Glastonbury. Subsequently, in 1996 he and his partner set up a wind turbine from which he started to generate and sell electricity. This grew into a successful company, generating a pre-tax profit of £236k in 1997 and now worth in excess of £100 million. Mr. Vince made no attempt to pay child maintenance despite his wealth and the family continued to live on state benefits.

In 2011, 27 years following the breakdown in their marriage and 19 years following their divorce, Ms. Wyatt lodged her financial application against Mr. Vince and sought a contribution towards her legal costs. Mr. Vince reacted by applying to the Court to strike out his ex-wife’s claim given the passage of time since their relationship.

The High Court at first instance dismissed Mr. Vince’s application to strike out the financial claim. The judge also accepted Ms. Wyatt’s claim that she required funds from Mr. Vince towards her legal costs and ordered that he pay £125,000 for that purpose. Mr. Vince appealed that decision and the Court of Appeal in May 2013 reversed that decision and ordered that Ms. Wyatt should not be allowed to proceed with her financial application.

Ms. Wyatt in turn appealed to the Supreme Court and judgment was handed down on 11 March 2015.

The Supreme Court unanimously allowed Ms. Wyatt’s appeal, ordering that her financial application should proceed. The costs award made by the original trial judge was restored.

The Supreme Court decided that family Courts do not have the right summarily to dismiss a claim without full consideration of all of the circumstances of the particular case. This would need to involve each party putting their full case before the Court. An application to “strike out” a claim is draconian and can only succeed where there are no reasonable grounds for bringing the claim or the claim is an abuse of the Court’s process. Thus, Miss Wyatt’s application was allowed to proceed.

The Supreme Court also decided against the imposition of a blanket limitation period (unlike in civil proceedings in which the limitation period is generally six years), again because in family law it is necessary to undertake a thorough examination of all of the circumstances of the case, rather than bypassing them on the basis of delay. This is, as Lord Wilson stated, consistent “with the potentially life-long obligations which attend a marriage”. Although courts will not encourage applications brought years after the divorce, an application may be made and an award will be considered, depending on the circumstances.

The effect of the judgment for Ms. Wyatt and Mr. Vince is to put them back to square one in their application, with the addition of a significant costs bill payable by Mr. Vince. While Ms. Wyatt has been allowed to pursue her financial claims, the Supreme Court has not made any decisions about the outcome.

The High Court will use its discretion in determining the quantum of Ms. Wyatt’s claims. It will take into account the delay in bringing her application, the reasons for the delay, and the effect of that delay on Mr. Vince, together with all the other factors in the case. Crucially, therefore, the effect of the delay will be considered in determining the application although it was not relevant to determine whether the application should have been made in the first place.

Another factor which will be considered will be Ms. Wyatt’s contribution. She will inevitably rely on the fact that she brought up the parties’ child in the absence of any contribution from Mr. Vince despite the fact that in the later years of the child’s minority he was in a position to contribute. As a result, Ms. Wyatt brought the children up in poverty. Contribution can be considered prior, during, and even after the marriage has ended, which will inevitably be a cornerstone of Ms. Wyatt’s case.

The Supreme Court was clear that the sum sought by Ms. Wyatt of nearly £2 million was “out of the question” and that she will have an uphill struggle to persuade the High Court of her case. A more realistic prospect may be a fund for her to purchase a more comfortable home, possibly for her life only, depending on the Court’s assessment of all of the circumstances.

It has been suggested in the media that a possible consequence may be a flurry of applications for financial relief made by ex-spouses who have been separated for decades. However, it should be remembered that the facts were quite extraordinary. Strike-out will not be available save in exceptional circumstances and so the correct response is to allow the application to be made and then show that the merits of that application are limited (due, for example to the lapse of time) and that no award should be made. These points will be made and considered in the broad exercise of the Court’s discretion.

Mr Vince has described the decision of the Supreme Court as “mad” and “open season for people who had brief relationships a quarter of a century ago”. To family lawyers, however, this case is a reminder of the wide ambit of the courts and their quest for “fairness” by looking at all of the circumstances of the case. Ms. Wyatt’s contribution to the family, despite having been made nearly 20 years previously, will as a matter of principle not simply be ignored and she will have the opportunity to set out her case.

Mr. Vince could have protected himself by applying to the Court at the time of the divorce to resolve the financial aspects at the time when she had no claim because of his impecuniosity.

The stark lesson of this case is the importance of addressing financial claims, rather than ignoring them and assuming their spouse will not seek financial remedy in the years to come. Specialist advice should be sought at the time of the divorce. However, even where there are no funds for a financial settlement, where there are children, legal advice may result in a nominal maintenance order for the spouse so that it can be revised upwards if the spouse makes good!

This article originally appeared in Wealthbriefing in March 2015. 

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