Clean Break Divorces Are Not Always Final – High Court Ruling

The whole point of so called clean break divorce agreements is that the parties are bound by the consequences, good or bad. However, in one unusual case, a family judge found that post-agreement events had so dramatically turned against an ex-wife that it was necessary to review her financial provision.

The wealthy couple, who had five children, had entered into a clean break deal that was, amongst other things, designed to yield an income fund of £3-4.5 million for the ex-wife. That, however, was premised upon the sale of the former matrimonial home for £8.5 million and the couples holiday home for £3.75 million.

Those estimates of the properties values turned out to be highly over-optimistic and neither of them had sold in the six years since the divorce. Respective offers of £6 million and £1.75 million had been received for the properties. If they sold at those prices, the ex-wife would be left with a very modest income fund that would be exhausted within three to four years. By contrast, the husband’s construction business had thrived since the divorce, making substantial profits.

In those circumstances, the judge found that the change in circumstances since the clean break was so fundamental that it justified releasing the ex-wife from one of the financial undertakings that she had given. That would have the effect of increasing the value of the income fund likely to be available to her to £2 million.

In upholding the husband’s appeal against that ruling in part, the High Court found that the judge had made a mathematical error and had given insufficient weight to the binding nature of the carefully negotiated clean break agreement that had been designed to achieve finality.

The Court, however, accepted that the case was exceptional and that the change in the couple’s circumstances post-divorce did justify reviewing the wife’s financial provision and amending the terms of the agreement. The Court heard further argument as to the precise terms of such amendments.