Divorce case study - financial settlement after long separation and impasse

Overview

The parties had been married nearly 10 years but had been separated for longer. The Husband (H) had left the family home due to the Wife’s (W) adultery. The parties’ children were adults and the W continued to live in the family home.. H had previously instructed solicitors and attempts had been made through solicitors to try and negotiate a settlement without success and even attempts to retrieve personal belongings and chattels from the family home were met with constant opposition by the W

The main marital asset was the family home which was valued at £1.5 million with a small amount remaining on the mortgage. We were instructed by H to help him realise his interest in the family home following the breakdown of the marriage.

Our approach and advice

• It was clear to us that our client had been extremely patient and reasonable in seeking to resolve matters amicably but to no avail. Something needed to change the status quo and make W deal properly with financial arrangements going forward.

• The key issue was establishing an agreed value for the family home, achieved by obtaining expert valuations. Both parties had similar pension funds and as such this did not require a pension sharing order to be made. Another issue we addressed was whether there would be a Capital Gains Tax (CGT) liability for the H because he had not been living in the family home for a number of years. A tax expert was instructed and a report obtained to confirm that there would be no CGT liability

• We advised the H that he needed to issue an application for a financial order to exert some real pressure on the W and kickstart negotiations in the hope that a contested final hearing could be avoided. Issuing the application would trigger the court to set a timetable that would enable the matter to proceed if necessary to a final hearing at which the court would determine what the financial settlement should be if the parties had failed to do so beforehand.

• · Issuing the application was the right tactical approach because the W initially failed to comply with the court directions for the parties to exchange financial information evidencing her obstructive approach and the necessity of issuing an application.

• We also obtained property particulars that demonstrated that if the family home was sold and the net proceeds distributed between the parties, they would both be able to purchase new homes without needing to raise a mortgage. This was crucial for the H who had left the family home for over 14 years and had been living in temporary accommodation since. The H also had a county court judgment which meant he would have difficulty in securing a mortgage and as such needed sufficient capital to be able to purchase a home without borrowing.

• A proposal on behalf of the H was made to the W on this basis in the hope that an agreement could be reached.

Outcome

The parties reached a settlement at a FDR hearing agreeing to the family home being sold and the net proceeds divided on the basis that the W receive 55% and the H receive 45% (approx. £630,000). This was in line with what the H had proposed. The H took into account that since leaving the family home the W had repaid the mortgage which had then been redeemed in full. The H was also able to collect his personal belongings including other chattels in the family home.