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PSL essential update – Divorce and Finance

Date:13 DEC 2016
Tis the season to be merry … As family practitioners around the country gear up for Christmas, with the inevitable last minute rush, we thought we’d provide you with this handy guide to the latest developments in finance and divorce. Read and enjoy with a sherry and mince pie (wishful thinking perhaps?).

What happens after an order is set aside?

In November the case of Goddard-Watts v Goddard-Watts [2016] EWHC 3000 (Fam) was published.  A year before the cases of Sharland v Sharland [2015] 2 FLR1367 and Gohil v Gohil [2015] 2 FLR1289, had focused on when a financial order should be set aside (eg for non-disclosure etc) and in October 2016 a new procedure for making such an application was introduced by FPR 2010, r 9.9A. In Goddard-Watts the court considered the approach it should take after the final order had been set aside, when rehearing the financial claim. The dilemma it faced was whether it should ‘start from scratch’ or whether it should employ an approach in which it isolated the resources that were not disclosed and deal only with those. On the facts of the case the husband’s non-disclosure had been in relation to two trusts and the court held that in this case it could isolate those undisclosed resources and deal only with those. The court explained that, despite the false disclosure in relation to the trusts, the parties’ other resources were divided in a way that was fair and remained fair. Mr Justice Moylan was at pains to emphasise that the courts have the discretion to determine the correct approach in the circumstances of the case. It was clear from Lady Hale’s judgment in Sharland that ‘there is enormous flexibility to enable the procedure to fit the case’. In some cases, this would require the court to ‘start from scratch’ but in others it would not. 

The full judgment can be found here, along with a helpful summary. The new edition of Red Book Plus contains a new flowchart and practice note on set aside applications, including the new FPR rules and relevant case law.

Sharland and Gohil – the impact

Another case in which the impact of Sharland and Gohil was apparent was the case of Roocroft v Ball [2016] EWCA Civ 1009, which also considered Wyatt v Vince [2015] 1 FLR 972. In this case the appellant made an application to set aside a consent order on the basis that her ex-civil partner had been guilty of material non-disclosure in financial remedy proceedings. The discovery of the non-disclosure occurred after her ex-civil partner had died and therefore it was her estate that applied to strike out the application. The trial judge refused to strike out the application but chose instead to use his case management powers under FPR 2010, rr 1.4, 4.1(3) and 4.4 to dismiss the appellant's application, which he regarded as being ‘without merit' and ‘doomed to failure'. The Court of Appeal allowed the appeal noting that the three cases cited above had been heard in the interim and that there had also been a consequential amendment to FPR 2010, r 4.4 in respect of applications to strike out, together with a corresponding amendment to FPR PD4A. The trial judge had had to approach the case at a time when the law lacked the clarity now found in the speeches of the Supreme Court. The judge erred in summarily dismissing the application and in any event, any true abbreviated hearing could only have taken place against the backdrop of the factors identified in Sharland and Gohil. The case was remitted to be listed for directions before a High Court judge. The full judgement and a summary can be found here and an article explaining more of the background is available here.

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Recently pensions have become a hot topic in family law.

The case of Goyal v Goyal has been up to the Court of Appeal and back down again, with differing answers to the question: ‘Can the court make a pension sharing order in respect of an overseas pension?’ At first instance the answer to this question was no and the judge made a mandatory injunction against the husband to transfer or assign the pension policy to the wife. At the husband’s appeal the Court of Appeal answered the question in the affirmative – yes you can make a pension sharing order in respect of an overseas pension. The Court of Appeal set aside the trial judge’s order, holding that it was an impermissible freestanding injunctive order and ordered the case to be reheard. At the first part of the rehearing Mostyn J disagreed with the Court of Appeal, stating that basic rules of statutory interpretation and the presumption against the extra-territorial effect of a statute means pension sharing is not available in relation to any foreign pension. Mostyn J suggested other routes that could be adopted to achieve direct sharing of a foreign pension. An analysis of Mostyn J’s decision can be found in Katheryn Mason’s article Pension sharing orders not available in relation to foreign pensions: Goyal v Goyal [2016] EWFC 50 (Fam).

Another important case in the world of pensions arrived in October.  Although not a family case the Court of Appeal’s decision in Horton v Henry [2016] EWCA Civ 989 is useful to be aware of when dealing with cases that may involve bankruptcy and pensions. The Court of Appeal confirmed that the court did not have the power to require a bankrupt to elect to draw down his pension in any particular way within the context of an application by a trustee in bankruptcy (trustee) for an income payments order (IPO) under s 310 of the Insolvency Act 1986. For further analysis of this decision see Pensions and insolvency: Horton v Henry [2016] EWCA Civ 989 by Christian Jowett.

Pensions, and specifically offsetting, were considered in George Mathieson’s article: Pension offsetting – is a consistent approach possible or even appropriate?

Decree Absolute delayed

In Thakkar v Thakkar [2016] EWHC 2488 (Fam) the High Court considered the circumstances in which an application for decree absolute can be refused. Applying Dart v Dart [1996] EWCA Civ 1343, [1996] 2 FLR 286 the test was that unless the wife was able to show special circumstances to defer it the husband should be able to obtain the decree absolute. This was a case where the wife said her husband was a billionaire who had not given full and frank disclosure. All of the assets in the case were offshore and held in very complicated structures that had changed within the recent past. The fact that there were offshore structures was the fundamental issue in the case and there was a potential for very considerable prejudice. The situation was one where it could be very significant if the petitioner was a wife or a former wife. The judge was satisfied that the wife had established special circumstances that were sufficient to override the otherwise strong presumption in favour of ending the marriage. The husband’s application was dismissed. The full judgment can be found here, together with a brief summary.

In other news

Happy Christmas from everyone at Family Law!