When can you delay Decree Absolute?
In this post we examine the ways in which it is appropriate to delay application for decree absolute in divorce proceedings.
The general position is that one should only apply for decree absolute once the financial remedies have been dealt with and a final order is in place. Until then, the parties may lose valuable benefits such as pension rights if they have divorced. In that scenario, if a party dies after decree absolute but before the financial remedy claims have been resolved, the other party loses status as “widow” or “widower” which often means they will lose the benefits they may otherwise have gained due to their relationship to the deceased.
Right of Occupation
It is also important to ensure that a party’s right to occupy the matrimonial home under section 30 of the Family Law Act 1996 (FLA 1996) is not lost. Here, both spouses have a right to enter and occupy the matrimonial home until the decree absolute is pronounced, unless the court orders otherwise under an occupation order. These rights expire on decree absolute.
If financial remedy claims have not been resolved by the time decree absolute has been made, then a spouse should make an application under section 33(5) of the FLA 1996 to extend their home rights beyond decree absolute.
Tax Consequences
Another reason to delay the decree absolute is that there could be adverse tax consequences. Or, if you become an ex spouse, it could make it impossible to make a claim at all, for example against onshore or offshore trusts or offshore assets. The latter was discussed in Thakkar v Thakkar [2016] EWHC 2488 (Fam) (08 June 2016). It is important to seek specialist tax advice in such cases.
Undertakings
If faced with any of the scenarios above, it is wise for a respondent to seek an undertaking from a petitioner that they will not apply for decree absolute until the financial claims are concluded.
Implementing Financial Orders
As a matter of course, once the financial claims are concluded, apply for decree absolute. Only then can the orders be implemented.
Petitions based on Separation
Where a petition is based on two years’ separation with consent or five years’ separation and there are pension benefits to consider, a respondent can make an application under section 10(2) to (4) of the MCA 1973 to have their financial position considered by the court. The application must be made before decree absolute.
If a petitioner refuses to give an undertaking not to apply for decree absolute, the respondent must make their application under this section.
Delaying Decree Absolute under the court’s inherent jurisdiction
In the case of Miller-Smith v Miller-Smith (No 2) [2009] EWHC 3623 (Fam) it was held that the court has a discretionary power under its inherent jurisdiction to delay decree absolute. Such power will only be used by the court in “special and exceptional circumstances” (at paragraphs 23-24). An example given by the court was of a respondent suffering serious financial or other disadvantage for which they could not receive compensation if the petitioner were to die after the decree absolute.
Another example of this being used was in the case of Evans v Evans [2012] EWCA Civ 1293. Here, the Court of Appeal delayed decree absolute until specified action had been taken by the husband, without which the wife would have been unable to enforce any share transfer order that the court could have made regarding his shareholding in his own company.
It is not always clear cut. In the Hong Kong case of J v V [2012] HCMC 3/2012, the judge commented that when the spouse relying on prejudice in the financial claims if decree absolute were made cannot establish real prejudice other than to say that there is no order in place as yet, that is not of itself a sufficient reason to delay the decree absolute. Therefore, using the making of decree absolute as a bargaining position is not allowed. Even when prejudice is established, it is not necessarily conclusive, because the other spouse might also be prejudiced by the court not making the decree absolute. The court must balance the prejudice to each party when exercising its discretion (paragraphs 26-28).
If the petition is based on a fact other than two years’ separation with consent or five years’ separation (meaning the respondent cannot rely on section 10(2) of the MCA 1973), then a respondent could make the application to delay decree absolute under its inherent jurisdiction, on the grounds that they may lose valuable benefits if decree absolute is pronounced.
Contact
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If you would like more details on this or want to discuss your family law matter, please do not hesitate to contact James, Frank, or Evelyn. Paradigm Family Law offers a free initial consultation with a top rated divorce lawyer and our fixed fee solutions cover financial proceedings from start to finish. You can call us on 01904 217225 or email us to [email protected].
