Ex-husband Ordered to pay 1.6 million a decade after he thought the Divorce and Finances were complete
Published on 20/01/2021
Honest negotiations when finalising a divorce financial settlement are essential as highlighted in a recent divorce case.
In this case, the couple separated in 2002. Following their divorce in 2006, the husband paid the wife £150,000 to pay off the mortgage and transferred the family home over to her.
When they first married they were both teachers but then in 1988 the husband began a business. He owned 99% of the shares and the wife had the other 1%.
In 1990, he stopped teaching to concentrate on the business. By the time they separated in 2002 they had three children. From this point the wife had no further dealings with the business. By the time of divorce, it had a turnover of approximately one million a year.
Although in 2006 the husband paid his wife £150,000 and the family home she never signed the settlement agreement which had been prepared.
The lawyer who represented the husband during the initial divorce and financial negotiations confirmed that the wife had agreed to the terms of the financial settlement but only on the condition that the husband provided a full picture of his financial circumstances, with documentary evidence to back it up. He never did.
In 2013, ten years after they separated and seven years since the initial financial settlement was agreed she applied for a financial remedy order.
The judge decided that as the husband had not provided the wife with full disclosure there has been no full and final settlement, which meant that there was no agreement.
The husband was ordered to pay his former wife a lump sum of £1.6m and to transfer 25% of his pension policies and shares to the wife and that decision was confirmed by the Court of Appeal.
This case emphasises the importance of making a full and honest disclosure when negotiating a financial settlement following divorce whether through solicitors or in mediation and the importance of ensuring that an agreement made following divorce is legally finalised by way of a Consent Order.
A Consent Order officially ends the financial relationship between a divorcing couple and means no further financial claims can be made against each other (as long as a full and honest financial disclosure has been made by all parties).
In another high profile case a wife made a claim against her former husband 27 years after their divorce. At the time of the divorce neither had any assets to fight over but the husband went on to build a multi-million pound business.
As there was no financial order made following their divorce the former wife succeeded, 27 years later. She was allowed to bring a claim against her former husband, despite the fact that he had no assets when they divorced.
Honestly negotiating and then signing a financial consent order is a crucial part of the divorce process. No one wants to be hit with a financial remedy order years after the divorce when they have moved on and rebuilt their lives.