Wife entitled to make financial claim on divorce despite receiving $16m on judicial separation
A wealthy businessman applied to strike out his wife’s claim for financial relief on divorce on the basis that it was vexatious, duplicitous and she had received $16m under a prior judicial settlement. His application failed. In this blog, I look at the reasons for the decision.
Divorce and judicial separation are not the same. Divorce terminates marriage, judicial separation does not.
At the time of the divorce proceedings, the couple were in their late 70s. The husband was the majority owner of a business worth around $1bn, his wealth having been built up during their 40-year marriage.
In 2010, the wife issued judicial separation proceedings. (A judicial separation is a formal process that allows a couple to separate and agree financial arrangements without divorcing.)
At the time of the separation, the wife's assets were £6.8m. The husband said his assets were "plus or minus £9m" but failed to give formal disclosure of his financial position. Under the judicial separation order, the wife was to receive $16,129,122 in two tranches, plus monthly payments of £21,600 until the lump sum had been paid. The order (made in 2011) recorded that the financial settlement was in respect of "these proceedings". The husband complied fully with the order.
In 2015, the husband issued divorce proceedings on the grounds of five years' separation. The wife claimed financial relief. The husband applied to have the wife's claim struck out on the grounds that it was vexatious and/or duplicitous, and that there had been a financial settlement in 2011.
The judge dismissed the husband's claim on the basis that:
1.There was no legal obligation on the wife to make her full financial claim on judicial separation. At the time, as the husband admitted, the parties intended to stay married.
2.Divorce and judicial separation are not the same. Divorce terminates marriage, judicial separation does not.
3.As the husband failed to make financial disclosure at the time of the separation, the wife did not have the information required to make a full financial claim. The wife's solicitors made it clear that the wife was seeking 'a fair share' of the husband's assets and income under English law. This share could not be quantified until the husband had provided details of his net worth. The judge said that the settlement agreed by the wife was clearly made on the basis that it dealt only with the judicial separation.
4.There was no evidence that the wife had misled the husband.
The wife will now be entitled to pursue her claim for financial settlement. Mr Justice Cohen ended his judgment with a plea to the parties: "They are now in their late 70s. It does not appear to me that either is in the best of health. This litigation has been going on for three years. They should not be spending time locked in litigation when there is plainly more than ample funds available in this case for it to be settled. I do urge them to consider mediation to try and bring matters to a closure."
If you would like advice about getting divorced or judicially separated, please contact me now at [email protected] or on 020 7616 5322.