Monday, April 15, 2013

T v T: The separation agreement that was never made into an order

Watford County Court  Image: Bencherlite
A quick look at T v T [2013] EWHC B3 (Fam) (28 January 2013), which concerned a husband's application to show cause why a financial agreement should not be made an order of the court.

The Facts
The parties entered into a separation agreement in 1991. Both parties were represented, and full disclosure had been made. The agreement essentially provided for the husband to transfer his interest in two properties to the wife, in return for a lump sum of £175,000, in full and final settlement. The agreement included the usual provisions for divorce after two years separation, and for the parties to invite the court to make an order dismissing all financial claims by either party against the other.

The parties were divorced in 1995, but the agreement was never made an order of the court.

The husband subsequently prospered, but the wife's financial circumstances deteriorated, to the extent that she "says that she is now in need". In 2012 she issued a financial remedy application, and in response the husband made an application to show cause why the agreement should not be made an order of the court.

The Judgment
The husband's application was heard by Mrs Justice Parker in the High Court, sitting at Watford County Court. Her approach was to ask herself the following:
(i) Had the parties reached an accord by which they intended to resolve the matrimonial affairs?

(ii) How have they conducted themselves?
She found (at paragraph 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..."
She continued (at paragraph 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."
Accordingly, she rejected the wife's application for financial provision, and granted the husband's application for the agreement to be made an order of the court.

Further to this, Mrs Justice Parker took the view that the proceedings were not financial remedy proceedings 'of the normal nature', to which the no order as to costs rule would apply, and she therefore ordered the wife to pay the husband's costs.

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