Neil v Neil

Where a financial remedy order has been obtained by fraud, it should ordinarily be set aside. The burden lies on the fraudster to show that the fraud would not have influenced a reasonable person or materially affected the order. The court may instead set aside only the affected provision where the fraud concerns a discrete issue and the remaining order can stand. A rehearing is unnecessary where the court can determine the proper outcome fairly and proportionately on the evidence. In deciding whether maintenance should be awarded, egregious conduct may be decisive, particularly where granting maintenance would allow the applicant to benefit from that conduct. The court may rely on an earlier mediated agreement where privilege has been waived and the agreement is sufficiently established.

The Husband applied to set aside a financial remedy consent order made on 8 July 2015, alleging that the Wife had procured substantive periodical payments by fraud and had obtained his uninformed assent to altered terms. He also sought a declaration concerning his share of the proceeds of sale of the former matrimonial home. The Wife denied fraud and sought enforcement and variation of the alleged maintenance obligation. She also applied for maintenance pending suit, although the decree absolute meant that the court had no jurisdiction to grant that relief. The central issues were whether the order had been procured by fraud, whether the affected provisions should be set aside, and whether the court should rehear the maintenance issue.

1. Fraud and set-aside. The Husband established, on the balance of probabilities, that the Wife had misled him, altered documents, and sent emails purporting to be from him to obtain a mortgage and secure a periodical payments provision he had not agreed to. The fraud vitiated the basis on which the order was made. Under Gohil v Gohil [2015] UKSC 61 and Sharland v Sharland [2015] UKSC 60, the burden of establishing the limited exception lay on the perpetrator of the fraud. No such exception was established.
2. Scope of relief. The Husband sought only to set aside paragraph 26 and determine the sum due under paragraph 25. That was a measured and appropriate response. Paragraph 26 was set aside. The Wife owed the Husband £248,930 under paragraph 25, payable within 28 days, with interest thereafter at 8% per annum.
3. Mediated agreement and finality. The Wife’s conduct and the open letter from her solicitors waived privilege in the memorandum of understanding and established that the parties had reached a binding clean-break agreement. She could not rely on her own deceit to avoid that agreement. Applying Kingdon v Kingdon [2010] EWCA Civ 1251 and FPR rule 1.1, the court was not required to order a rehearing where the correct outcome could be determined justly and proportionately.
4. Maintenance. Even taking the Wife’s account of the Husband’s present resources at its highest, there was no realistic prospect of a substantive maintenance award. Her egregious conduct, the financial consequences of her fraud, the debt owed to the Husband, and the cost of further proceedings were decisive. Paragraph 26 was therefore replaced by a clean-break order in life and death.
5. The maintenance-pending-suit application was dismissed for want of jurisdiction. The Wife was ordered to pay the Husband’s costs on the indemnity basis, assessed at £250,000 inclusive of VAT.