Sally Nikoline Cummings v Fredrick Julian Fawn

An agreement resolving financial remedy claims should generally be upheld if freely entered into with full appreciation of its implications, unless it would be unfair to do so. A court assessing fairness may act summarily and need not produce a detailed asset schedule. However, it must make findings on material factual matters required to exercise its discretion under Matrimonial Causes Act 1973 section 25.

Where fraudulent non-disclosure is established, the victim has no duty to discover the truth by due diligence. An agreement or consent order should be set aside unless the non-discloser proves by clear and cogent evidence that a reasonable person with full knowledge would have reached the same agreement.

The wife appealed against an order approving a financial remedy agreement reached with the husband. The agreement followed repeated negotiations and had not yet been converted into a consent order when repudiated. The first-instance judge found that the husband had failed to disclose a substantial inheritance but held that the non-disclosure was not operative, and concluded that the agreement was fair.

Permission was granted on six grounds, including non-disclosure, earning capacity, the assessment of assets and liabilities, fairness, and costs. The central issues were whether the first-instance judge had made the findings necessary to assess the wife’s needs and whether the husband’s fraudulent non-disclosure invalidated the agreement.

1. Appeal allowed in part. Grounds 1 and 4 succeeded. Grounds 2, 3, 5 and 6 were determined as set out below. The first-instance judgment and order were set aside, save that implemented parts of the order were not reversed. The wife’s financial remedy claims were remitted for a de novo rehearing.
2. A court considering whether to uphold a freely negotiated financial agreement should give it effect unless, in the circumstances prevailing, it would be unfair to hold the parties to it. Where unfairness is alleged without duress, mistake or fraud, the court may take a broad-brush approach and need not tabulate every asset, liability or precise outcome.
3. On the evidence, the first-instance judge was entitled to find that the wife had an unhindered earning capacity which she had failed to exploit. The appellate court would not interfere with findings of primary fact or evaluations unless unsupported by evidence, based on a misunderstanding, or ones no reasonable judge could reach. The wife had not shown that the finding met that threshold.
4. In considering a clean break under Matrimonial Causes Act 1973 section 25A, the question is whether the applicant has shown by clear and cogent evidence good reasons why a clean break should not be imposed. A decision not to impose a clean break is exceptional. The wife had produced no such evidence.
5. The first-instance judge nevertheless erred in failing to determine which debts were likely to require repayment, the sum reasonably required for alternative accommodation, and the mortgage that the wife could raise. Those were key factual matters in the exercise of the discretion under section 25. Without findings on them, the agreement could not lawfully be upheld.
6. The husband’s non-disclosure of an inheritance worth over £4 million was fraudulent. The wife’s vague subjective belief that the husband’s parents were wealthy was not objective knowledge of the inheritance. The wife was not required to discover the information through her own enquiries. Applying Sharland and the principles concerning fraudulent deception, the husband bore the burden of proving by clear and cogent evidence that a reasonable person with full knowledge would have made the same agreement. He failed to do so.
7. The matter was transferred to the Central Family Court for directions and rehearing. The wife was awarded her costs of the first-instance hearing and the appeal, subject to summary assessment.

• High Court (Family Division): appeal from the order and judgment of HHJ Jacklin QC dated 30 May 2022. Grounds 1 and 4 allowed; grounds 2, 3 and 5 refused; ground 6 became academic on the outcome.
• First instance: the Family Court approved the agreement, found it fair, rejected the challenge based on non-disclosure, and ordered the wife to pay £19,000 towards the husband’s costs.