However the High Court has just upheld the terms of a Separation Agreement that was made in 1991! In the case of T v T 2013 EWHC B3 (Fam) the court heard that an agreement was reached. As no divorce was obtained at that time a Separation Agreement was drawn up and signed by the parties. A mutual disclosure of assets took place, as is usual, and both the husband and wife were represented by highly competent solicitors.
The terms of the agreement provided for the wife, who was the wealthier party at that time, and who had capital and significant income from a trust to receive the family home in London. She would also receive a jointly owned flat in France. However in return she had to pay the husband a lump sum of £175,000. The husband was liable to pay maintenance for the child and they would share the costs of school fees.
A divorce later followed. Unwisely the separation agreement was never made into a court order so the wife was technically free to make financial claims in the future. Since the Separation Agreement was implemented the husband had remarried and the wife later had a child by another man whom she did not marry.
The husband’s business prospered and by the time of the court proceedings his interest in a company was worth over £1.6m his pension was worth over £1m. His other capital assets, including the property which he now jointly owned with his second wife, were worth £630,000. His income, however was a comparatively modest £29,000 per annum.
When the family’s child went to university in 2009 the husband started paying maintenance to her direct. In October 20011 the wife’s solicitors wrote to the husband’s solicitors claiming that the maintenance agreement was never concluded and asked for financial disclosure. Some months later the wife issued her application for financial remedies (formerly ancillary relief) in the original divorce proceedings. In response the husband made an application to show cause why the agreement should not be made an order of the court.
The husband did in his statement explain that he and the wife had used the agreement as a template for their independent lives and had acted upon it. He assumed that the formal step of lodging the order had been attended to by his extremely able solicitors. It did not occur to him, however to check that this had been done.
Previous case law makes it clear that such agreements are often the most important and compelling feature that the courts will look at. In looking at financial issues the courts consider “all the circumstances of the case”. It was noted that the wife had delayed for over 20 years in seeking any financial remedy against her husband. The husband said robustly it was too late for her to seek to put the clock back to rewrite history when he has conducted his life and set up his new family on the assumption that everything had been agreed. The Judge Mrs Justice Parker reviewed the case law and found that the evidence did not support the wife’s contentions that she had been under pressure from her husband at the time of the original agreement and had been bullied by her solicitor in to entering into the agreement. There was nothing to suggest that the agreement was not fair at the time and that the wife had not been competently advised. The Judge asked herself firstly had the parties reached and accord by which they intended to resolve any matrimonial affairs, and secondly how they conducted themselves.
The court held that it was an agreement which was entered into, was intended to be acted upon and acted upon. In the cases in those circumstances it must be regarded as being of “magnetic importance” the length of time since the agreement was entered also secured the position.
The Judge accepted that if there had been material non disclosure then it would have been relevant to whether or not the agreement was fair. The Judge did not agree however that the wife had been mislead as to the existence of and quantum of the husband’s pension. The Judge said (at para 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…..This case shows that the courts are continuing to treat Marital Agreements whether they be Prenuptial Agreements, Postnuptial Agreements or Separation Agreement as having increasing weight if a court is later asked to determine the issue of what, if any, financial remedy would be appropriate.
It was a good result for the husband. However he could have been spared all of the expense and stress of the proceedings if only he had asked his solicitors to draw up a consent order in the divorce proceedings. It is not always realised that financial claims do not come to an end automatically on divorce – even where a separation agreement has been reached.