Zenith Family Current Awareness

When not to get divorced

24 November 2016

Marisa Allman

It’s something of a conundrum in financial remedy cases that in order to get the ball rolling the petition for divorce has to be issued, but once it is rolling it can be very hard to stop. The recent case of Thakkar v Thakkar is the first time in a long while that the court has looked at when the court can refuse to make a decree absolute pending resolution of financial claims, and the court itself in that case commented on the apparent dearth of recent authority on the issue.

In the case of Thakkar the wife had issued a petition and financial remedy proceedings were underway but not concluded, and there were serious allegations of non-disclosure concerning complex off-shore companies and trust structures. The husband had applied to make the decree absolute, and the wife opposed the application. The court considered its jurisdiction to refuse to make a decree absolute and the grounds for doing so;

I am of course concerned with section 9(2) of the Matrimonial Causes Act 1973, which states:

"Where a decree of divorce has been granted and no application for it to be made absolute has been made by the party to whom it was granted, then, at any time after the expiration of three months from the earliest date on which that party could have made such an application, the party against whom it was granted may make an application to the court, and on that application the court may exercise any of the powers mentioned in paragraphs (a) to (d) of subsection (1) above."

And (a) to (d) simply say that the court can make the decree absolute or it can rescind the decree or it can require further inquiry or otherwise deal with the case as it thinks fit.  It is therefore clear that by virtue of (d) I can refuse to allow the application if I think fit.  So that is what the statute says.

Until very recently it was thought that the only authority on the subject was first instance authority, which of course is persuasive on me, but not binding.  It has since been discovered that, in fact, the Court of Appeal has made a determination on this issue in a case called Dart v Dart, which is already well-known, having been reported in relation to the then approach to applications for financial provision by wives in cases where the assets are extremely large.  In that case, however, the situation was different to the one here.  It was different because the petitioner in that case was Mr Dart and he was clearly simply intending to apply at the end of the six weeks to make the decree absolute.  Mrs Dart attempted to take pre-emptive steps to stop that, so it was not a strict application pursuant to section 9(2).  However, Mr Webster, who appears on behalf of Mrs Thakkar in this case, accepts that I should deal with it on the basis that Dart is the law that I must apply in relation to this application and I therefore do so.

The case of Dart is clear.  There is reference to a decision of Brandon LJ in England v England [1980] 10 Fam Law 86 where he said:

"It was contended for the wife on this appeal that there were no circumstances in which the Court had power to delay the making absolute of a decree nisi.  I do not accept that contention.  It is in my view clear beyond doubt that the Court has the power to do that in the exercise of its inherent jurisdiction where there are special circumstances which may be just that it should be done." 

The Court of Appeal, Butler-Sloss LJ (as she then was) goes on to say as follows:

"Consequently one starts with this position, that the husband has the right to a decree absolute after the appropriate period following decree nisi and that period has now elapsed.  In the normal course of events he would be able to obtain the decree absolute unless the wife is able to show special circumstances to defer it.  At the end of the day it is an exercise of the discretion of the trial judge, but that exercise of discretion weights the granting of the decree absolute against the special circumstances very heavily in favour of the grant.  It is not a balancing exercise in the ordinary sense."

So that is the test that I have to apply.

Effectively the wife in this case was saying to the court she didn’t know what prejudice she might suffer because she didn’t really know what assets the husband had or where it was, but the size, location and the complexity of the assets here meant that the court shouldn’t cast her adrift whilst this was being investigated because there might be significant prejudice to her. In particular, the wife wasn’t in a position to establish where she would stand on the husband’s death in the event that she was no longer a spouse in relation to overseas trusts and entities. The court accepted this argument in a case where Moor J held that there were special circumstances applying the test in Dart v Dart;

“Trust structures, particularly offshore; foundations; bearer shares and the like raise notoriously difficult issues for the Family Court, both as to the determination of financial remedy applications and, subsequently and perhaps equally importantly, as to the enforcement of orders that are made.  It can make a very real difference, particularly in offshore jurisdictions, whether a litigant is a wife or a former wife”

“I have very considerable sympathy for a wife who comes along and says, "You cannot determine at this interim stage the factual matrix behind this case, so I cannot tell you the exact prejudice I would face by pronouncement of decree absolute.”

Although the court in Thakkar was considering the issue under the auspices of s.9 of the Matrimonial Causes Act, there are strong parallels with applications under section 5 of the MCA to prevent the court making a decree absolute where there is a petition based on 5 years’ separation and the respondent maintains there would be grave financial or other hardship.

The key concern in these cases is often what the effect of the other party’s death would be, particularly where a pension sharing order is likely.

I had recently to advise on resisting an application for an expedited decree absolute after 5 years separation where the husband was terminally ill and wanted to re-marry before his death. At first blush it seemed unlikely that the court would prevent such an application on compassionate grounds, but it emerged that the main asset was a valuable pension, the wife was bankrupt and there were no other capital assets to which an Inheritance Act claim could sufficiently attach to compensate the wife for the loss of not being a spouse at the point of death.

On the other side of the coin last year I represented a wife in circumstances where the husband applied for decree absolute following the wife’s petition so he could remarry. He had already transferred significant capital to the wife to represent what he said were half of the assets. The husband had cancer, but with a good prognosis. The possibility of him dying during proceedings was a relevant factor but there were sufficient other assets to compensate for any loss of pension in the event of the husband’s early death. The wife agreed to the decree being made absolute and the husband did remarry but before the financial remedy claim was determined the wife died during the proceedings, and the husband had no remedy against the assts he had already transferred to her.

Often a party’s Inheritance Act claims are not fully considered until the point of drafting a final consent order, but it’s as well to be reminded to keep an eye on the possibility of an untimely death throughout the case. Where there are special circumstances, the case of Thakkar may prove useful to more parties endeavouring to stop the decree absolute ball rolling before claims are determined, even where the opposing party doesn’t yet have the evidence to prove prejudice.

Current Awareness

By the Family team