The international law firm considers the issues arising from a case in which a divorced wife, who broke up with her husband three decades' ago, still pursued her former and now very wealthy spouse for payment.

The following article considers issues stemming from a recent major divorce case, a regular topic in the wealth protection and structuring field, as readers will know. The author of this item is Suzanne Todd, partner in the family law team of Withers. We invite readers to respond.

If you have no assets when you marry and still none when you divorce, surely there is no need to seek the intervention of the Court to “dismiss” the non-existent claims arising from that ended relationship?  Think again.

In 2014, in the case of Wyatt v Vince, the Supreme Court confirmed not only that Ms Wyatt had the right to pursue financial claims against Mr Vince, arising from their two year marriage which had come to an end 31 years earlier, but also that she had a reasonable expectation of achieving a modest sum. In April the parties agreed a settlement with Ms Wyatt receiving a lump sum of £300,000 ($441,012), in addition to the £325,000 Mr Vince had paid towards her legal fees to date. The judgment approving the settlement has now been made public. Although this case has a very specific set of facts, there are clear implications on a wider scale. 

A rags to riches tale
Ms Wyatt and Mr Vince met and married in 1981, when he was aged just 19 and living in a shared house. She was just 21. The couple treated Emily, Ms Wyatt's two year old, as a child of the family and they went on to have a son together, Dane, born in 1983. The parties separated in 1984, after “scarcely” two years marital cohabitation and, from then on, both experienced years of “profoundly unsettled life”'. Mr Vince pursued a travellers' lifestyle and Ms Wyatt also moved around, trying to support the children on very sparse income and with little or no financial support from Mr Vince, and relying on state housing and benefits.  

In 1992, Ms Wyatt petitioned for divorce but, crucially, the parties did not seek to address or finalise any financial issues between them (presumably failing to see the point of seeking half of nothing). Shortly afterwards, Ms Wyatt met another man and went on to have two further children with him, although he has also been uninvolved in their lives. From 1995, this single parent family put down some roots, moving into a council house in Monmouth described in the Supreme Court judgment as being in a “desperate state of repair”. They lived in very straitened circumstances.  

At the same time, things began to change for Mr Vince as he began to investigate the business possibilities of generating energy through wind turbines. In 1996 Mr Vince secured planning permission to place a wind turbine on top of a hill near Stroud. He began to generate and sell electricity, making a net profit of £236,000 in 1997. He is now the sole shareholder of Ecotricity Group Ltd, a company which, through others, provides green electricity to at least 70,000 homes and businesses in the UK from its fleet of turbines.  The value of his company is at least £57 million. Mr Vince lives with his second wife, their small son and Dane, who moved to live and work with his father at age 18, in a Georgian hill fort overlooking Stroud.

In 2011, 19 years after the divorce, Ms Wyatt issued a claim for all forms of financial provision arising from her marriage to Mr Vince. Her claim specified “with questionable forensic wisdom” her need for housing at £550,000 and, given her limited earning capacity, a lump sum from which to draw an income for the rest of her life, of £1.35 million (a total claim of £1.9 million).  Ms Wyatt also made an application, in view of her impecuniosity, that Mr Vince pay her legal fees to allow her to pursue this claim against him.  

Reviewing the merits
Let us just re-cap: the marriage was “scarcely more than two years”; it had broken down 31 years ago; and the standard of living enjoyed by the parties prior to the breakdown could not have been lower. Mr Vince did not begin to create his wealth until 13 years after the breakdown and Ms Wyatt made no contribution, direct or indirect, to its creation. Finally, there is an unexplained delay of 13 years when Ms Wyatt was aware that Mr Vince's circumstances had changed and he was becoming wealthy, before she actually made her claim. Put like that, Mr Vince's application to have her claim struck out, for having no reasonable grounds and being an abuse of the court process, might appear entirely reasonable.  
However, as has been well publicised, Mr Vince's straightforward application to have Ms Wyatt's seemingly questionable claim struck out, made it all the way to the Supreme Court, which felt that the claim should be allowed to continue.  

Consistent with the potentially life-long obligations which attend marriage, there is no time-limit for seeking orders for financial provision for the benefit of a spouse following divorce. It is essential for the Court to conduct a provisional examination of the issues as part of its duty to actively to manage cases, which includes identifying the issues and tailoring future procedure, and the application cannot simply be struck-out without any consideration.  

As to the merits of Ms Wyatt's underlying substantive claim, the Supreme Court acknowledged the limitations. There was no claim based on a relationship-generated need, given the circumstances of the case and in particular the financial impecuniosity of the parties for the duration of their short relationship.  

However the Supreme Court focused on a duty of the Court under the Matrimonial Causes Act (section 25) “to have regard to the contributions which each of the parties has made to the welfare of the family, including any contribution by looking after the home or caring for the family”.

Such contributions are not limited to those made prior to the separation or even during the marriage and form the basis of Ms Wyatt's claims against Mr Vince. Lord Wilson concluded that Ms Wyatt should expect “comparatively modest success”, sufficient perhaps to enable the purchase of a somewhat more comfortable and mortgage free home for herself and her remaining dependants.  Let's be fair, a mortgage free property would, for many, be far more than comparatively modest success. 

Ms Wyatt's case was listed for four days in July 2016 and we now know that the parties reached settlement in April 2016 and heads of terms were agreed, setting out what they both had agreed was the “appropriate award to the wife”.  This outcome, although celebrated by the judge as evidence that compromise is achievable, even at a late stage, was described by Mr Vince as a commercial decision to end the litigation as cost-effectively as possible.

Privacy and disclosure
The key legal issue addressed in this latest judgment relates to privacy. Historically, financial proceedings flowing from divorce have been heard in private and have been protected by a cloak of privacy.  The law is changing. Guidance was published by the family courts in 2014, moving towards more openness in the family law arena and this judgment is further confirmation of the balancing act the Courts are willing to perform when private finances become of public interest. 

The judge in this case determined that the ordinary starting point of privacy in family matters was readily displaced in this case. The open hearings in the Appeal Court and Supreme Court meant that much of the “private” information was already in the public domain. The publicity to date meant that there was significant public interest in the outcome of the case. 

In addition, this was not a case where Mr Vince could argue that his financial disclosure required special protection. Mr Vince had run the “rich man's defence” i.e. he had the means to meet any award that the court could feasibly make in the circumstances and therefore the minute detail of his financial circumstances were irrelevant. This meant that he was able to avoid detailed disclosure, relying on financial information that was already in the public domain.  

However the judge ruled against Mr Vince's application to publish details of Ms Wyatt's outstanding bill of costs to her solicitors and therefore, despite publication of the overall settlement, an important piece of the jigsaw remains secret. We will never know what proportion of the £300,000 settlement was actually received by Ms Wyatt. 

Implications
The lack of clarity over the sums actually received by Ms Wyatt may only fuel the fire of prospective claims. For example, an optimistic claimant might interpret the scant information to suggest that Ms Wyatt achieved £300,000, a vast sum bearing in mind her standard of living until now. A spiteful claimant might notice that the overall cost to Mr Vince is likely to be approaching £1 million in costs and award and unquantifiable stress and upset. The nuisance value of a claim, however limited the actual quantum might be, is undeniably huge.

Although Mr Vince's vast wealth may have made him more vulnerable than most to this claim, and perhaps more vulnerable than most to fighting what he perceived to be an injustice given the fact that he could afford the legal costs, there is no bar to a potential claimant seeking to make a claim against a former spouse who has more modest assets.  The Supreme Court has made it clear that such a claim should be investigated by the Court.  In the ordinary course, and as part of that investigation, a respondent will be required to provide full and frank disclosure.  

Whilst Mr Vince was able to run the “rich man's defence”, this would not be open to a respondent who had more modest assets and was less able to meet any award.  In that case, full and intimate details of their financial circumstances would need to be provided, both to the Court and to the claimant, potentially someone that they have had no contact with in 20 or even 30 years. If the case is in the public interest, or it is appealed, those financial details could then be made public, and even reported in the press.  

More to follow?
Whilst the circumstances of this case have been described as “bizarre” and “unusual”, the underlying principle espoused by the Supreme Court - that it is never too late to make a financial claim in respect of a marriage, however long ago that marriage took place and however short that marriage was - remains.  

All of these factors are another reminder of the importance of addressing the financial issues at the time of separation and divorce and obtaining a Court Order dismissing potential future claims between formerly married parties. In an age when pre-nup agreements hold greater weight in court, albeit they are still not legally binding, the case also illustrates how they can be a significant tool for preventing future issues from arising and ensuring privacy.