The recent case of HAT v LAT  EWFC 162 is the latest reminder of the importance of obtaining a financial remedy order reflecting a couple’s financial agreement on divorce, including a “clean break”.
The recent judgment by Mr Justice Peel in HAT v LAT is an interim decision in a case involving parties who separated in 1994 and divorced in 1998. The couple entered into a deed of separation some 30 years ago, which provided:
The husband made the payment to the wife, but the agreement was not converted into a court order, meaning there was no official “clean break”. In addition, the husband paid the wife maintenance up to the amount of £8,500 per month from 2002 onwards, and helped the wife to buy a home in London in 2009 (albeit with a declaration of trust in place).
When the husband stopped the payments altogether in December 2022, the wife applied to court to seek an additional £5m, interim maintenance and an order that the husband provide her with funds to cover her legal fees (a Legal Services Payment Order, or LSPO). The husband argued that the separation agreement should be upheld, and so no further provision was due to the wife.
Whilst acknowledging that it is highly unusual for a party to make a financial claim when such a substantial amount of time has passed since the divorce (25 years in this case), the significance of the delay was minimised by the fact that in addition to the terms of the separation agreement, the husband had provided the wife with ongoing financial support (income and housing) for more than 20 years.
Peel J made several important observations:.
This interim decision highlights the difficulties that can arise if a clear financial order is not made at the time of divorce.
In this case, an official “clean break” was never achieved. This meant either party could apply to court for further financial provision in the future, as their claims against each other had been dismissed. Stating in the separation agreement that there was to be a “clean break” did not have the same effect as a court ordered clean break and put the husband (the financially stronger party) at risk in the future.
The passage of time may ordinarily have meant the wife had a much weaker argument when she brought her case, but monthly payments and housing support made voluntarily by the husband over 20+ years meant that court recognised the wife’s financial dependent. To the court, ceasing payments overnight would not be fair to the wife.
The key points for clients and contacts to consider are:
For more information, please contact Sarah Green.
With thanks to Megan Davies, Trainee Solicitor, Family team.