Are Consent Orders Always Final?

When a financial settlement has been agreed between the parties or ordered by the court, the terms are incorporated into a Financial Remedy Order. This order should be final and should prevent either party from changing their mind and trying to make further claims.

There were two cases last year where a Financial Remedy Order was made but in both cases the matter had to go back before the court. One of these cases involved the interpretation of the wording of a financial order and the other, that the order was obtained by fraud by one of the parties.

How did the Court Interpret the Order?

Legal documentation can sometimes be difficult to understand and can be open to interpretation. Sometimes though, parties try to make an order say what they want it to say. This happened in the case of Derhalli v Derhalli. A Financial Remedy Order was made in September 2016 which provided for the former matrimonial home to be sold but until sale the wife and the two grownup daughters of the marriage would continue to reside there. During that time, they were to pay the mortgage and all utility bills relating to the property.

Unfortunately, the property was taking time to sell and after about six months the husband served a notice upon the wife to vacate the property within 28 days or alternatively pay him market rent for the house which he assessed at £5,000 per week. When she did not vacate the property or pay rent, the husband issued court proceedings.

The Judge, at the first set of court proceedings, interpreted the order to say that from the date of the court order, the wife would occupy the property as a gratuitous licensee and this was terminable on reasonable notice. She would then be a trespasser liable to pay damages for use and occupation until she delivered vacant possession. That meant that on that interpretation, the wife would have to pay damages to the husband for use and occupation of the property until she either vacated it or sale. The wife appealed this decision.

The Appeal

On the appeal, the court found that the previous Judge’s interpretation was wrong. The wife had a right of occupation in the matrimonial home and therefore could not be a licensee. The court also said that the terms of the order indicate that the wife could remain in the property with the daughters until the property was sold so, again, she could not become a trespasser simply because the husband had served a notice upon her and there was no indication that she would be expected to pay rent as she was paying the mortgage and all of the household bills. The court took the view that the wife had the right to continue to occupy the property until it was sold, and it was only at that point that she would have to move out and that she did not owe any rent to the husband.

This is a very common type of order and the decision of the appeal court does in my view reflect the correct position.

What Happens if an Order is Obtained by Fraud?

In the case of Neil v Neil, the wife was accused of obtaining the financial remedy order by fraud.  The husband and wife had reached an agreement at mediation whereby the former matrimonial home was to be sold and the net proceeds divided equally between the parties. However, to ensure the housing needs of the wife and child were met, the wife was to receive the first £1m from the sale but if this came to more than 50% of the equity, the husband would have a charge over her new property for the difference and he would receive payment if the wife remarried or sold the property. The mediation documents also confirmed that it had been agreed that spousal maintenance was not considered necessary because both parties had professional careers and equal incomes.

The wife instructed her solicitors to incorporate the terms of the agreement into a Financial Remedy Order. The husband did not instruct solicitors. When the wife instructed her solicitors, she told them not to include the provision for the husband to have a charge on her new property and to include a provision for nominal spousal maintenance in her favour, saying that this had been agreed between them. The husband had not, however, agreed to either of these clauses.

A copy of the Financial Remedy Order was forwarded to the husband, but he did not read it properly so mistakenly signed the order with the changes that the wife had made. The order was then filed with the court.

Dishonest Actions

The wife then continued to be untruthful in obtaining a mortgage to purchase the property. She wanted to have a mortgage of £900,000 and told the bank that she was receiving maintenance of £5,500 per month from her husband which he would pay until she remarried. This was not the truth. He was only paying that amount towards expenses on the former matrimonial home until it was sold. When the bank asked for confirmation of this, the wife asked her solicitors to get the order back from the court and amend it to include the maintenance order. The husband denies ever having knowledge of or signing the amended order. The order was, however, granted by the court.

When the former matrimonial home was sold, the net proceeds of sale amounted to just over £1,300,000. The wife only paid £100,000 to the husband and did not provide him with a charge on her new property for the difference.  Eventually, the husband instructed his own solicitors and applied to set aside the court order. The Judge found that the wife had “been thoroughly dishonest” by not including the charge to the husband in the order, including nominal maintenance which she then amended to include a maintenance order without the husband’s agreement and not paying the husband the correct amount from the sale proceeds. Although the husband should have read the order properly, he did not have the benefit of legal advice and the wife had taken these actions in the knowledge that she was being dishonest. There is also a question as to whether the husband actually signed the amended order. The court therefore decided that the order would be set aside.

In Conclusion

It is unusual for matters to have to go back to court once an order has been made. This blog gives just two examples of when a matter may have to go back to court. The most common times when further involvement of the court is required is when one party is not taking the action they are meant to do under the terms of the court order, for instance not paying a lump sum to the other party by the date ordered or causing delays in sale of a property.

If you have any concerns over an order that has already been made and you wish for further advice, then a member of our Family Team would be happy to help you or you can contact me on 01283 214231 or a.wilding@timms-law.com.

Alison Wilding
January 2020