Master 15

 

21/12/01

 

IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND

 

FAMILY DIVISION

 

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BETWEEN:

 

 H

 

-V-

 

H

 

 

 

 

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MASTER REDPATH

 

            In this somewhat unusual application the Respondent wife (“the wife”) asks the Court to consider her financial position as it will be following divorce pursuant to Article 12(2) of the Matrimonial Causes (Northern Ireland) Order 1978.  The parties separated as long ago as 1994 although the Decree Nisi in the case did not issue until 4 April 2000.

Central to the case was a matrimonial agreement entered into on 6 January 1995.  Although this comes to Court as an Article 12(2) application, if there are no grounds for overturning that agreement, I take the view that the wife’s application must fail.

            The petitioner husband (“the husband”) and his wife separated in February 1994 after the husband allegedly discovered his wife was having an affair.  There then followed a period of separation which I will go into in greater detail during the course of this judgment, culminating in a matrimonial agreement signed on 6 January 1995.  This agreement was entered into by the wife directly against the advice of her solicitors, who drew up a form for her to sign in which she makes it clear that she was instructing her solicitors to accept the proposals made by her husband.

            The wife now asks the Court to ignore this agreement on the following grounds:-

1.         Undue pressure

            The wife in her evidence gave a number of alleged incidents of undue pressure by the husband and in particular the following:

(i)         His threatening and aggressive behaviour at the office of their mutual solicitor on 14 February 1994;

(ii)        Allegations of harassment and bullying behaviour particularly during a period when the wife’s father was diagnosed as being terminally ill;

2.         Failure to make full and frank disclosure

            It was alleged during the period of the negotiations the husband failed to make full and frank disclosure and in particular:-

(i)         He failed to disclose to the wife the existence of a partnership between them until it came to light by discovery on 21 May 2001;

(ii)        He failed to make any adequate disclosure in relation to his businesses and business accounts;

(iii)       He failed to prepare an adequate schedule of assets;

3.         Abuse of a dominant position

            A number of matters were referred to in an effort to prove this aspect of the case including the following:-

(i)         The husband having the benefit of negotiating with the advice and assistance of the family solicitor who had acted for them for over 20 years whereas the wife had to seek advice from solicitors who knew nothing of the husband’s financial means and assets;

(ii)        The husband being a shrewd and successful businessman whereas the wife contended that she had no business acumen whatsoever.

4.         Unforeseen financial circumstances since the signing of the agreement   

This point was evidenced by the fact that the wife has had to assume the liability for the maintenance of the parties’ son P even though he is now over eighteen years of age.

5.         Disparity in current financial circumstances

            It was alleged on behalf of the wife that the husband currently has assets of in or around £½m with £60,000.00 per annum income whereas the wife is now reduced to living on benefits.

            The husband rejected each of these allegations claiming that the matrimonial agreement arrived at in 1995 should not be set aside and that the wife was not entitled to any further relief.

            It was accepted that in 1994 the total value of the assets in the marriage stood at £243,814.00.  The matter proceeded by way of a clean break with the wife taking assets to the value of £109,500.00; being made up of a Renault Clio worth £2,500.00, an MGB car worth £5,000.00, the matrimonial home valued at £75,000.00, house contents valued at £12,000.00 and cash of £15,000.00.  It should be noted that a number of the assets valued at £87,500.00, were in fact joint assets.  After the agreement the husband was left with the assets valued at £121,907.00; in particular two business assets, properties in Lisburn and Belfast which were producing income.  This represented 37% of the matrimonial assets and was conceded by the husband during the course of the case that it was not a good settlement for the wife.

            As already stated this application is made under Article 12(2) of the Matrimonial Causes (Northern Ireland) Order 1978 whereby the Court is asked to decided whether or not proper financial provision has been made for the wife.  In essence, however, the thrust of the case is that the Court has been asked to set aside the agreement entered into between the parties in January 1995.

            Duckworth’s Matrimonial Property and Finance states as D1[25]:

“… It is no part of the Court’s duty to upset agreements fairly and freely entered into by individuals possessing the requisite degree of competence.  Provided there has been independent legal advice and the parties have acted at arms length – and provided, of course, there has been proper financial disclosure – the Court will rarely intervene.”

 

The circumstances in which the Court is prepared to intervene are set out in Edgar –v- Edgar

 

[1980]1 WLR at 1410.  Ormrod LJ says at page 1417:

“So, the circumstances surrounding the making of the agreement are relevant. Under pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad advice, an important change of circumstances, unforeseen or overlooked at the time of the making of the agreement, are all relevant to the question of justice between the parties.  Important too is the general proposition that formal agreements properly and fairly arrived at with competent legal advice should not be displaced unless there are good and substantial grounds for concluding that an injustice will be done by holding the parties to the terms of their agreement.”

             

I will deal with each of the points made by the wife in turn.

1.         Undue Pressure

            There was evidence of some pressure being put on the wife by the husband; in particular his behaviour upon receiving requests for discovery, when he clearly exhibited to his wife and indeed her mother, impatience and annoyance at having his financial affairs inquired into.  It was also alleged on behalf of the wife that she was told she would not get back into the matrimonial home until she agreed to the signing over of her interest in the other matrimonial properties.  It was further alleged that the illness of the wife’s father at the time of the negotiations was relevant as he was suffering from a terminal illness and that the emotional stress and trauma suffered by the wife as a result made her much more susceptible to agreeing to the deal that was finally reached.  Evidence was also given of a dispute in the presence of the parties’ solicitor.

            I found on the evidence before me that whilst the husband may well indeed have exhibited a degree of annoyance and impatience this was not sufficient to constitute the good and substantial grounds for setting aside the agreement as laid down in the Edgar case.  It is also notable that it was accepted by the wife, who no doubt was suffering as a result of her father’s illness that far from using that illness to put pressure on her, the husband gave every assistance to the wife’s family and her father, visited him regularly in hospital and indeed organised the funeral.

            In the case of Evans –v- Evans (1981) 2 FLR at 33 the Court did set aside an agreement but the circumstances in that case are quite different from the present case.

            In that case the wife had a long history of psychiatric disturbance consisting of anxiety and depression which had been diagnosed as a form of schizophrenia.  Her children were on the at risk register.  She attended at her husband’s solicitor who advised her to seek independent legal advice.  She declined to do so and signed a document by which she essentially gave away all her rights to the matrimonial property.

            Another case in which an agreement was set aside is Camm –v- Camm (1983) 4 FLR 577 although in that case the Court was greatly influenced by alleged bad advice given by the wife’s solicitor.  There is also an element in that case of pressure on the wife who due to her fragile mental state did not feel able to conduct contested proceedings.  It is notable that in Smith –v- McInerney [1994] 2 FLR Thorpe J refers to the Camm at page 1080 and says –

“Mr Hess relies upon the decision of the Court of Appeal in Camm –v- Camm (1983) 4 FLR 577, but that was a truly exceptional case, and is, so far as I know, the only case in the Court of Appeal post Edgar –v- Edgar in which an applicant has been allowed more than he or she contracted for.”

 

            In this particular case the wife received proper advice, was advised not to enter into this agreement but chose to do so.  It was also accepted by the wife that she had never sought a personal protection or exclusion order and that there had been no pressure of any kind put on her in the four months prior to the signing of the agreement. There is also evidence of documentation from the wife setting out in the period from the date of separation proposals similar to the agreement ultimately reached.  Accordingly, as I have already said whilst there is some evidence of annoyance and impatience on the part of the husband in this case, I do not feel that the behaviour exhibited at the time leading up to the signing of the agreement is sufficient to allow me to set it aside on the grounds of undue pressure.

2.         Failure to make full and frank disclosures

            It is clear in this case that no schedule of assets was exchanged or proper discovery given by the husband to the wife.  It is also however clear that the wife had a fairly comprehensive idea of what assets were held both in joint names and solely by the husband.  It is absolutely clear that had the wife wished to proceed to a hearing of this matter full disclosure would have had to have been given before the case came to hearing, and that it was her choice, against the advice of her legal advisers, to settle the case early.

            The allegations made in relation to the non disclosure of the partnership in the Heaney Houses business were somewhat more interesting.  The husband’s accountant gave evidence that the Revenue received a form of election essentially notifying them of the dissolution of the partnership.  He gave evidence that the Inland Revenue would have returned the Form of Election unless it had borne the signatures of both parties and this is hard to argue with.  Evidence was taken about the circumstances relating to the signing of the Form of Election.  The wife said that she had no recollection whatsoever of having signed the Form of Election whereas the husband gave a very full, perhaps a little too full, description of the circumstances in which the Form of Election was signed.  To that end the credibility of both parties as witnesses became very much an issue in the case.  Having heard the evidence of both parties I took the view that the evidence of each of them was not entirely to be trusted.  In particular, as far as the husband was concerned, it was quite clear that he made no admission of having been in an adulterous relationship prior to the breakdown of the marriage until he gave evidence before me, even though he had been relying on his wife’s adultery to ascribe to her the blame for the breakdown of the marriage.

            I also questioned the husband in relation to documentation that he had forwarded to the Planning Office in relation to a property at Andersonstown Road in which he made the case to them that he was living in that property.  This was done for the purpose of getting a particular planning permission.  Under questioning he admitted that in fact that was not the truth and that at the relevant time he was living in a property at Colin Glen Road.

            I also questioned the husband about claims made in his annual accounts relating to the provision of food for his bed and breakfast business.  I was far from satisfied about his evidence in relation to that matter and again concluded that he was not telling the entire truth.

            The wife’s evidence in some respects was also less than satisfactory.  In particular, the account that she gave about the relationship she was having with another man, which relationship was given by the husband as a reason for the breakdown of the marriage, was quite incredible.

            In cases such as this the wife has to make her case and prove it on the balance of probabilities.  Given the view I took of the evidence of both parties and taking into account the evidence of the accountant, and the inability of the Inland Revenue to provide the original Form of Election for inspection, I took the view that the wife could not prove on a balance of probabilities that she had not in fact signed the Form of Election.  If indeed she had signed the form this would have been evidence of her knowledge of the existence of the partnership.

            In relation to the other matters regarding failure to make full disclosure it is clearly established that there is a duty of full and frank disclosure in matrimonial cases.  See Livesey –v- Jenkins [1985] 2 FLR 813.  The facts of that case were however quite different in that the wife had failed to disclose to the husband that prior to the date of the agreement she had become engaged to another man.  This had been a deliberate course of action on her part designed to mislead her husband.

            In the case of Barber –v- Barber [1987] Family Law at 125 the material non disclosure related this time to a Consent Order, where proper detail had not been given of the value of the husband’s pension.  It should be noted that in the Barber case the wife did not insist in settling the case against the advice of her legal advisers, but even so Lord Justice Stephen Brown sitting as a Single Judge refused the wife leave to appeal out of time.  According to the note in Family Law His Lordship agreed with Judge Hallam’s decision that there was no non disclosure because the wife had acknowledged that she was aware generally of the pension scheme at the time of the Consent Order.  There was therefore no concealment by the husband and the wife had no prospect of succeeding on appeal.

            In that note the matter of delay is also raised and it is clear in this case that there is a very significant delay between the signing of the agreement and the bringing of any application questioning the matrimonial agreement.  Accordingly for the reasons stated I find that there are no grounds for setting aside the agreement on the basis of the allegation of failure to make full and frank disclosure.

3.         Abuse of dominant position

            Duckworth’s Matrimonial Property and Finance states at D1[29]:-

“The mere fact that the husband has vast wealth at his disposal and the wife has none is insufficient to upset an agreement: it must be shown that he abused his dominant position.”

 

            In this particular case the husband retained the services of the family solicitor and the wife was advised by the family solicitor to seek advice elsewhere which she did.  I was not convinced by the arguments advanced on the part of the wife in relation to the issue raised that the wife’s new solicitors came into the case “cold”.  They were in a position to take as much time as they wished to deal with the relevant points in the case.  They were in a position to take such advice from Counsel as was necessary and indeed in all likelihood would have done so, but for the fact that the wife insisted on settling the case against their advice.  In particular, no evidence whatsoever was adduced to indicate how alleged abuse of a dominant position affected the negotiations in the case, given that the wife was not prepared to take the advice of her own legal advisers.

4.         Unforeseen financial circumstances

            It was argued on behalf of the wife that she has had to assume total liability for the maintenance of the son of the marriage P even though he is of full age.  No evidence was provided to me as to the nature of P’s disability.  No medical evidence was produced to indicate why he should be so dependant on his mother.  Furthermore the husband gave evidence that he had made attempts to provide for P, and indeed had purchased a house in his name, with the hope that he might set up his own bed and breakfast business in it.  He had also provided the son with vehicles from time to time and had taken him on holiday.  The cases involving unforeseen circumstances which have led to agreements being varied have involved much more substantial evidence than was available to me in this case.  Even in such cases the Court has refused to set aside an agreement made freely between the parties.  In the case of N –v- N (Consent Order: Variation) [1983] 2 FLR at 868 the wife due to an unforeseen set of circumstances had to finish one career and take up a subsequent career as a barrister.  She applied to extend the agreed period of maintenance from 5 years to 8 years.  Even though it was shown that she could not have foreseen that her original career would have ended in the way that it did the Court refused the relief sought.

5.         Disparity in current financial circumstances

            I have already set out the disparity in the current financial circumstances of the parties.  This is not in itself grounds for setting aside an agreement.  At the time the agreement was entered into, although there was not an exact 50/50 split of the assets then owned, the main deficiency from the wife’s point of view was failure to make provision for any ongoing periodical payments.  Any growth in the assets owned by the husband and shrinkage in the assets owned by the wife is due to their own actions since that date.  My feeling is that the wife did not press for ongoing periodical payments because of her desire to have the matter settled; and also possibly because of a degree of guilt at being apprehended in her relationship with another man.  There is also no doubt that she wished to reconcile with her husband.  All of these matters may have influenced her decision. 

            This was not an open and shut case.  In particular I had some concerns about the husband’s failure to make full and frank disclosure.  My feeling is however that agreements such as this should only be set aside in exceptional circumstances and my view is that the wife has failed to establish such exceptional circumstances.  Accordingly I hold that proper financial provision has been made for the wife and dismiss her application.

            On a procedural note I have followed the guidance given by Girvan J in the case of McCourt –v- McCourt 200 NIJB 577 by looking at the claim in substance and not dealing with the issue of the agreement as a preliminary issue, which is in fact the procedure recommended by Duckworth at D1[24].  I prefer the approach of the Courts in Northern Ireland as I cannot see how the preliminary issue, if it is such, can be dealt with without full consideration of the circumstances of the case.

            I will now hear argument as to costs.