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MFPA 1984 Part III award overturned by Court of Appeal

Agreement by the parties was Radmacher fair

A husband has succeeded in setting aside a lump sum award to his wife of £1,148,480 in proceedings under the Matrimonial and Family Proceedings Act 1984 Part III.

In Zimina v Zimin [2017] EWCA Civ 1429 the husband appealed against an order by Mrs Justice Roberts who had ordered him to pay to the wife a lump sum of £1,148,480 together with provision for the children of the marriage.

The issue before the Court of Appeal related not to the quantum of the lump sum in itself, but as to whether it was appropriate for the judge to have made a lump sum order at all.

The case turned on the proper application of sections 16–18 MFPA 1984 against the backdrop of the decision of the Supreme Court in Agbaje v Agbaje [2010] UKSC 13, [2010] 1 AC 628. The case specifically related to a situation where, following foreign divorce proceedings, a foreign consent order was made with a number of ancillary agreements, in circumstances where both parties had legal representation. The terms of the order having been implemented, five years later (there having been no change in her circumstances) the wife made an application under Part III seeking substantial additional provision for herself.

It was accepted by both the appellant and respondent that it was unusual for an order to be made under Part III where a foreign order was in place. The question for court was whether this was one such case.

Ultimately at first instance the judge had decided the case upon her assessment of the wife's future needs, although assessed conservatively to reflect 'the egregious and, in part, tactical delay' in issuing proceedings on the part of the wife.

In the opinion of Lady Justice King, giving the judgment of the court, the judge fell into error 'notwithstanding that she had tried the case with the utmost care and had produced detailed and conscientious judgments'. The Court of Appeal determined that a number of important features militated against the making of an order. They were:

a) That the provision was made by agreement, an agreement which was not only Radmacher fair but which would have withstood the Edgar test. The judge did not consider whether in those circumstances it was right for the court to go behind the public policy principle that there should, if at all possible be finality in litigation and that agreements freely reached should be upheld (particularly given her findings about delay).

b) There had been no change in the wife's circumstances whether of a Barder nature or otherwise. This application could properly be regarded as a wife seeking a 'second bite of the cherry'.

c) The delay with the serious finding that it had in part been tactical.

d) In Vince v Wyatt [2015] UKSC 14 it was held that "In order to sustain a case of need, at any rate if made after many years of separation, a wife must show not only that the need exists but that it has been generated by her relationship with her husband".

e) That it was hard, if not impossible for the wife to advance a case that she had, or would, suffer injustice or hardship absent the making of an order. In the light of Agbaje, such a finding would not inevitably have led to the dismissal of her application even so, the absence of hardship or injustice must still be an important consideration for a judge when considering whether 'in all the circumstances' an order should be made.

f) That the financial benefit provided by the husband was adequate in 2009 and remained adequate. The order made by the judge in effect amounted to no more than a contribution by the husband to the wife's costs of the litigation.

Following an evaluation of all the relevant factors including the wife's needs and the matters set out above, Lady Justice King concluded that it was not appropriate to make an order under Part III. In reaching that decision, she had in mind the findings made by the judge in relation to the wife's long term and continuing contribution in respect of her care of the children and also that, in the light of Court of Appeal's decision, the wife will have to modify her standard of living in the long term.

Richard Kershaw, Partner at Hunters Solicitors, commented:

"As ever, the outcome of the case is driven by its narrative. Much turned on the fact that the parties had freely reached a binding agreement, then made into a formal court order in Russia, with the assistance of lawyers on either side, producing an outcome which the Court of Appeal found was undoubtedly fair; she had received $10m out of a then matrimonial "pot" of $13.3m.

"Part III claims remain a legitimate way of alleviating the adverse consequences of inadequate financial provision on divorce in foreign countries, a scenario which is increasingly likely in today's fragmenting world. Individuals in this position should not be disheartened by this judgment."

In the Court of Appeal Lewis Marks QC and Catherine Cowton, both of Queen Elizabeth Building, instructed by Stewarts Law LLP, acted for the husband. Richard Todd QC and Nicholas Yates, both of  1 Hare Court, instructed by Vardags, acted for the wife.

For the judgment, click here.

8/10.17