A successful businessman applied to strike out his wife’s application for financial relief on divorce on the basis that her claims were an abuse of the court process, as they had already been dealt with as part of judicial separation proceedings in 2011. His application was dismissed, the judge noting that divorce and judicial separation are different causes of action and divorce was not in the parties’ contemplation in 2011. Matthew Humphries and Amy Wills look at the case of AR v JR [2018] EWHC 3626 (Fam).
The husband and wife were married for 40 years and had two adult children. During the marriage, they acquired a substantial fortune as a result of the husband’s successful business in the offshore oil industry. When divorce proceedings were issued in 2015, the husband’s business was believed to be worth just under $1bn net.
Judicial separation
In 2011, the parties separated and the wife initiated judicial separation proceedings. (This is a process that enables parties to separate formally and agree financial arrangements without necessarily divorcing.)
Despite the husband failing to give any meaningful financial disclosure, the parties’ solicitors were able to negotiate a financial settlement in the judicial separation proceedings. A consent order was subsequently approved by a judge, which provided for the wife to receive a staged lump sum of around $16m, together with monthly payments of £21,600 until such time as she had received the full $16m.
Divorce proceedings were not referred to at any point during the 2011 settlement discussions.
Divorce
In 2015, the husband filed a divorce petition based on five years’ separation. Several months later, the wife initiated her claim for a financial order in connection with those divorce proceedings. The husband applied to strike out the wife’s claim on the basis that, even if the 2011 order did not specify that it dealt with any future claims on divorce:
- he had understood that it did; and
- the wife ought to have made any financial claims at that stage. To do so now amounted to an abuse of the court process.
The husband’s application was dismissed. The judge noted that the court’s jurisdiction to strike out claims ought to be used only very sparingly where the facts amount to an abuse. He found the wife was not obliged to make her full financial claim at the time of judicial separation; divorce is a separate process that brings an end to a marriage. Further, divorce was not in the parties’ contemplation in 2011. The wife did not have sufficient information at that time to enable her to assess the full value of her capital claim. It was also relevant that the wife did not mislead her husband in any way in 2011.
Partner Matthew Humphries commented:
“This case is a reminder for anyone dealing with or going through judicial separation proceedings (which are increasingly rare) to consider carefully the possibility of future divorce proceedings when negotiating the terms of a financial settlement and drafting the court order that follows.”
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