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Divorce Settlement Not Written in Stone

Although an ex-wife fully understood the terms of a divorce settlement by which she agreed to pay her former husband a total of £450,000, a family judge was entitled to exercise her discretion under Section 31 of the Matrimonial Causes Act 1993 to vary the agreement when the woman fell on hard times. The Court of Appeal rejected the ex-husband’s arguments that the settlement was effectively written in stone.

Under the terms of the settlement, the ex-husband had agreed to transfer the former matrimonial home into the ex-wife’s sole name as consideration for the £450,000 payment. However, subsequent to the agreement, the ex-wife’s business suffered a dramatic decline and went into administration. £210,000 owed to the ex-husband, together with interest, remained outstanding.

The ex-husband took enforcement proceedings against the ex-wife and served a statutory demand upon her as a necessary precursor to bankruptcy proceedings. However, a family judge granted the ex-wife a variation of the settlement which, whilst not reducing the £450,000 sum, granted her a substantially longer period in which to pay the balance due.

On appeal, the ex-husband’s lawyers argued that the ex-wife was ‘fully on board with all the issues in the proceedings and understood the terms of the agreement’ and that the family judge had exceeded her powers in granting the variation.

Dismissing the ex-husband’s appeal, however, the court ruled that, as there was no reduction in the sum that would fall due over time, the family judge had been entitled to take account of the ex-wife’s reduced circumstances and to vary the amount of instalments and the period over which they would have to be paid.