The end of nil-valuations for high-rises?
In this blog, originally published by LexisNexis, Jane Keir examines the court’s judgment in Thakkar v Thakkar and the ‘special circumstances’ in this case that delayed the granting of a decree absolute.
The Family Division dismissed the husband’s application for a decree absolute in circumstances where the wife had chosen not to apply for it pending resolution of her financial remedies application and there was a dispute between the parties about the extent of the husband’s assets, some of which were held offshore. In the circumstances, the potentially complex structures in which the assets were held, and the impact which being a wife or ex-wife might have had on the wife’s remedies, constituted special circumstances which over-rode the presumption in favour of ending the marriage.
This case looked at the circumstances in which a court might exercise its power to delay the making absolute of a decree nisi of divorce.
Ordinarily a petitioner, will obtain a decree nisi having proved the content of his or her divorce petition. The earliest date upon which the decree nisi can be made absolute is six weeks from the date upon which the decree nisi is pronounced.
If the petitioner chooses not to obtain the decree absolute, then it is open to the respondent to apply once three months have passed from the date the petitioner could first apply—ie the six week period—so in effect four-and-a-half months from the date of pronouncement of the decree nisi. In practice, where the financial claims of the parties have not been settled or adjudicated and a substantive financial order made, no application for the decree to be made absolute should be made if it would prejudice one party’s financial position for example, leaving a party unable to claim benefits under a pension scheme, if in the event of a death after decree absolute but before the financial order is made following pronouncement of the decree absolute they are no longer the spouse.
It is good practice to seek an undertaking from a respondent that he or she will not seek to make the decree nisi absolute until the financial order is made. In the case of Thakkar, Moor J was asked by the petitioner wife not to allow an application from the respondent husband to pronounce the decree absolute and dissolve the marriage before the financial order had been made. The parties married in 2008 and separated in February 2013. On 27 June 2014, the wife filed her divorce petition whilst at the same time, making her financial application. The wife’s solicitors were concerned to extract an undertaking from the husband not to apply for the decree absolute until the final determination of her financial application. The husband agreed and gave an undertaking to provide 14 days’ notice of his application for decree absolute. The wife’s solicitors accepted the undertaking and a decree nisi was pronounced on 30 July 2015. The husband, in fact, applied for the decree absolute at the expiration of the three-month period on 23 December 2015.
Section 9(2) of the Matrimonial Causes Act 1973 (MCA 1973) is the provision which allows the party against whom the decree nisi has been pronounced to seek to have it made absolute at the expiration of the three-month period from the earliest date on which the petitioner could make the application. MCA 1973, s 9(2) says that the court may exercise its powers to delay the pronouncement of decree absolute and so the power is discretionary. It can delay the granting of decree absolute if ‘special circumstances’ exist. The point came before the Court of Appeal in the case of Dart v Dart  EWCA Civ 1343,  2 FLR 286. Butler-Sloss LJ (as she then was) held that the exercise of the discretion weighs the granting of the decree absolute against the special circumstances very heavily in favour of the grant so that it is not a balancing exercise in the ordinary sense.
The wife’s case in Thakkar, in relation to her financial application was that the husband was a billionaire and that he had not given full and frank disclosure. She referred to trust structures, particularly offshore, foundations and bearer shares and argued there were issues around whether or not the husband was a beneficiary or whether his mother and sister owned the assets to which the wife referred. The judge said that such matters raised:
‘notoriously difficult issues for the family court, both as to the determination of financial remedy applications and, subsequently and perhaps equally importantly, as to the enforcement of orders that are made. It can make a very real difference, particularly in offshore jurisdictions, whether a litigant is a wife or a former wife.’
Again, he was at pains to stress that he was making no finding of facts in relation to any of the matters before him in relation to the financial application, but he felt that the wife had proved that this case was one where ‘special circumstances’ pertained and that he should dismiss the husband’s application for the decree nisi to be made absolute.
While the wife in the case of Thakkar succeeded in persuading the judge that the special circumstances she had established should enable him to dismiss the husband’s application, the court did not define or give further guidance as to other sorts of ‘special circumstances’ that might arise in cases where there are no offshore assets but nevertheless, there are very live and real issues as to alleged non-disclosure. If the party seeking to delay pronouncement of the decree absolute can show that he or she would suffer financial detriment if the decree absolute is pronounced that might be enough to dissuade a respondent from making the application. However, the Court of Appeal was very clear in Dart that the presumption, in favour of pronouncement of the decree absolute, weighs heavily against the finding of special circumstances, so a delay in making the decree absolute will be very much the exception.
If acting for the petitioner, thought needs to be given at the outset as to whether there are any facts or circumstances known to him or her which should delay the pronouncement of the decree absolute. The issue may not arise where the petitioner is the financially superior/secure party. Additionally, it may be that the petitioner is satisfied as to the level and extent of financial disclosure made by the respondent and it is possible to see whether there is any likelihood of his or her position being prejudiced. If there is, or so that there is clarity and certainty, it may always be better to clarify the position concerning pronouncement of the decree absolute and dissolution of the marriage before the proceedings are issued.
This article was first published as an interview with Kate Baumont on Lexis®PSL Family analysis on 16 November. Click for a free trial of Lexis®PSL.
If you should have any questions, please contact Jane Keir or a member of our family team.
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