News & Views

Sensible Divorcees Put Personal Animosity Aside - Court of Appeal Ruling

Any good lawyer will tell you that it is far better for divorcing couples to agree how their assets should be divided, rather than fighting it out in court. A Court of Appeal case showed, however, that, where personal animosity persists, it is only too easy for the terms of such agreements to themselves become the subject of dispute.

The case concerned a very wealthy couple who, following highly acrimonious divorce proceedings, resolved to settle their differences. They signed a consent order which it was hoped would lead to a clean break. Amongst other things, the order required the husband to make a series of seven-figure lump sum payments to the wife. It also provided that the former matrimonial home should be sold 'forthwith' and the proceeds divided equally between them.

It was envisaged that an immediate sale of the property would be achieved at a price in excess of £7 million. In the event, however, the high-end property market stalled following the outcome of the 2016 Brexit referendum. The wife remained living in the house for about two and a half years before a buyer could be found. The eventual sale price was a disappointing £5.9 million.

Prior to the sale, the husband – who it was agreed was the property's sole legal and beneficial owner – served a notice on the wife, requiring her to either vacate the house within four weeks or to pay £5,000 a week in rent. After she refused to take either of those courses, he launched possession proceedings against her. He also sought £600,000 in damages for alleged trespass.

Following a preliminary hearing, a judge found that the wife occupied the house as a mere gratuitous licensee and that the husband was entitled to give her reasonable notice to quit. On expiry of such notice, the wife became a trespasser liable to pay damages. Those rulings were, however, subsequently overturned after the wife appealed to a more senior judge.

Dismissing the husband's challenge to that outcome, the Court noted that, when they signed the consent order, both husband and wife were confident that the desirable property would sell quickly. With no significant delay in the sale being envisaged, the order made no specific provision in relation to the wife's occupation of the property pending sale.

Notwithstanding the order's silence on that point, the Court found that, on its true interpretation, its meaning and effect was to permit the wife to occupy the property until the date of its sale. She was in the interim required to pay outgoings on the property, but was under no obligation to pay occupational rent.

Describing the case as a somewhat sorry cautionary tale, the Court noted that the proper interpretation of the consent order was, in the end, rather obvious. Personal animosity between the former couple had, however, driven them to make use of their considerable resources to litigate the matter through two appeals.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.