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Wyatt v Vince [2015] UKSC 14 (11 March 2015)
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Interesting case and shows WHY you should always get finances settled / clean break orders in place when you divorce.
Interesting case and shows WHY you should always get finances settled / clean break orders in place when you divorce.
It will be convenient to describe the appellant and the respondent as the wife and the husband even though they were divorced 22 years ago.
The circumstances of the case are highly unusual. The suit for divorce proceeded in the Sunderland County Court and, within weeks of the grant of the decree absolute on 26 October 1992, the court file was transferred to the Gloucester and Cheltenham County Court. But that court has either destroyed or mislaid the file. The current internal instruction to courts is to retain divorce files for 100 years but to allow them to strip them of most documents (including, oddly, the petition) after 18 years from the date of the final order. The fact that not even a stripped file has been found suggests that the whole file has been mislaid. Furthermore neither party presently holds any document relating to the divorce proceedings other than the decree absolute. In 2011 the wife issued an application within the proceedings for financial orders, in particular for an order that the husband should make payment of a lump sum to her in satisfaction of all her claims. She also applied for an order that the husband should make interim periodical payments to her in sums equal to her estimated costs of the substantive application pursuant to the decision of the Court of Appeal in Currey v Currey (No 2) [2006] EWCA Civ 1338, [2007] 1 FLR 946. The husband cross-applied for an order that the wife's substantive application, which had been fixed to be heard for three days beginning on 15 April 2013, be struck out pursuant to Rule 4.4 of the Family Procedure Rules 2010, S1 2010/2955, ("the family rules"). On 14 December 2012 Mr Nicholas Francis QC, sitting as a deputy judge of the High Court, Family Division, dismissed the husband's cross-application and, on the wife's application, ordered the husband to make interim periodical payments to her, indeed "directly to [her] solicitors", at the rate of £31,250 per month for four months (ie a total of £125,000) beginning on 2 January 2013 ("the costs allowance order"). The husband appealed to the Court of Appeal against both orders. By orders dated 13 June 2013 that court (Thorpe, Jackson and Tomlinson LJJ, [2013] EWCA Civ 495, [2013] 1 WLR 3525), set aside the orders of the deputy judge; struck out the wife's substantive application; and ordered that, of the £125,000 which by then the husband had paid in full, the wife should repay to him such sum as exceeded the state of her account with her solicitors on 17 January 2013, which amounted to an order for repayment of £36,677 ("the repayment order"). The court explained its striking-out order and its repayment order in judgments delivered on 8 May and 13 June 2013 respectively.
The circumstances of the case are highly unusual. The suit for divorce proceeded in the Sunderland County Court and, within weeks of the grant of the decree absolute on 26 October 1992, the court file was transferred to the Gloucester and Cheltenham County Court. But that court has either destroyed or mislaid the file. The current internal instruction to courts is to retain divorce files for 100 years but to allow them to strip them of most documents (including, oddly, the petition) after 18 years from the date of the final order. The fact that not even a stripped file has been found suggests that the whole file has been mislaid. Furthermore neither party presently holds any document relating to the divorce proceedings other than the decree absolute. In 2011 the wife issued an application within the proceedings for financial orders, in particular for an order that the husband should make payment of a lump sum to her in satisfaction of all her claims. She also applied for an order that the husband should make interim periodical payments to her in sums equal to her estimated costs of the substantive application pursuant to the decision of the Court of Appeal in Currey v Currey (No 2) [2006] EWCA Civ 1338, [2007] 1 FLR 946. The husband cross-applied for an order that the wife's substantive application, which had been fixed to be heard for three days beginning on 15 April 2013, be struck out pursuant to Rule 4.4 of the Family Procedure Rules 2010, S1 2010/2955, ("the family rules"). On 14 December 2012 Mr Nicholas Francis QC, sitting as a deputy judge of the High Court, Family Division, dismissed the husband's cross-application and, on the wife's application, ordered the husband to make interim periodical payments to her, indeed "directly to [her] solicitors", at the rate of £31,250 per month for four months (ie a total of £125,000) beginning on 2 January 2013 ("the costs allowance order"). The husband appealed to the Court of Appeal against both orders. By orders dated 13 June 2013 that court (Thorpe, Jackson and Tomlinson LJJ, [2013] EWCA Civ 495, [2013] 1 WLR 3525), set aside the orders of the deputy judge; struck out the wife's substantive application; and ordered that, of the £125,000 which by then the husband had paid in full, the wife should repay to him such sum as exceeded the state of her account with her solicitors on 17 January 2013, which amounted to an order for repayment of £36,677 ("the repayment order"). The court explained its striking-out order and its repayment order in judgments delivered on 8 May and 13 June 2013 respectively.
It may be helpful briefly to notice the wife's argument that, even had the Court of Appeal been correct to have concluded that the costs allowance order should not have been made, it was not open to it to direct repayment of any part of the £125,000 other than £2539. The argument is that the wife could not be ordered to make repayment because she had never received any part of the sum paid; that, while it remained in their client account, the wife's solicitors held it for the benefit not of her but of the husband (hence his entitlement to repayment of £2539); and that, when the balance of the fund was released in stages into their office account, it became the property of the solicitors. In support of this argument the wife cites Twinsectra Ltd v Yardley [2002] UKHL 12, [2002] 2 AC 164, in which the House of Lords held that a solicitor for a borrower might hold borrowed money in trust not for the borrower but for the lender subject to the solicitor's power to apply it by way of loan to the borrower for such purposes as had, to his knowledge, been agreed with the lender. I cannot accept this analysis of the costs allowance order. It provided for the husband to make interim periodical payments to the wife and indeed to make them directly to her solicitors or, in other words, via them. Had he not duly paid under the order, it would have been for her to enforce it. When the instalments were paid into their client account, the solicitors therefore held them for her benefit albeit subject to the terms of the order. If an order for payment made in respect of legal services under section 22ZA of the 1973 Act or made under the preceding jurisdiction recognised in the Currey case has been wrongly made, the appellate court must at least have jurisdiction to order that sums paid under it should be repaid; otherwise such orders would, to the extent implemented, in practice be unappealable. But, as by its order for only partial repayment the Court of Appeal recognised, an appellate court has a discretion whether to exercise its jurisdiction to order repayment in the wake of a successful appeal. Where the payments have been applied to the purchase of legal services in accordance with the order, the court should in that regard carefully consider all the circumstances, including whether the payer, say a husband, should have applied for a stay of the order and whether, in the light of his circumstances and the wife's ability to make repayment to him, it is reasonable to exercise the discretion to order repayment whether unconditionally or subject to a prohibition against enforcement against her without further leave. The exercise should certainly not be equated with that of determining the incidence of costs at the conclusion of an appeal.
