Divorce: how Grenfell affects financial settlements

In a recent case*, the parties’ marriage had broken down in January 2019, after which they decided to initiate divorce proceedings, in addition to financial remedy proceedings.

At the heart of the couple’s financial dispute was the jointly-owned family home, a flat in East London not far from the City of London, which had been valued at £1.1 million. At the Financial Dispute Resolution hearing, both parties agreed that the flat would be transferred to the wife, on the basis that she paid a lump sum of £300,000 to the husband in return. 

However, a fully-fledged Financial Remedies Order (or ‘consent order’) reflecting the terms of this agreement could not be drawn up straight away as the Decree Nisi was yet to be obtained within the divorce proceedings.

In the words of the judge, the story then unfolded. The parties soon fell victim to the long shadows of the awful Grenfell Tower disaster. 

The building in East London had been inspected for the purposes of a surveyor’s report. It soon came to light that a fire safety certificate did not exist. As a result of government guidance following the Grenfell Tower disaster, any valuer coming across such a problem was obliged to decline to give a property a substantive value until the fire safety certificate was available. The surveyor in this case was therefore required to state that the flat was worth £0.

The wife believed this was simply a problem relating to paperwork, as it had been suggested that there were no cladding issues with the building. Therefore, she decided to take a gamble and press ahead with the consent order process, rather than draw the problem to the attention of her husband or, indeed, the court. 

In June the following year, over 6 months after the court had sealed the consent order setting out the parties’ agreement, it was revealed that there were in fact major problems with the cladding from a fire safety perspective and extensive remedial building works were required.

In light of the news, the wife issued an application to set aside the sealed consent order. She wanted to renegotiate the level of lump sum payable to the husband in accordance with the family home as it now is, rather than as it was previously thought to be. This would have put the case back to square one.

The court’s decision

The judge stressed the important principle of finality when it comes to financial settlements. The circumstances must be truly exceptional before a capital settlement can be reopened. He was of the opinion that, in this particular case, the relevant ‘setting aside’ test was not met. 

In short, the wife had known that there was a potential problem. She had hoped that it was capable of being resolved and therefore did not do much about it. If she had withdrawn her consent to the deal before the final order was made by the court, the outcome may well have been a different one.

The judge decided to make an order for the sale of the East London flat, as requested by the husband. However, the judge did delay its implementation to allow for a reasonable opportunity for the cladding issue to be resolved.

This case clearly highlights the possibility of unexpected problems arising throughout the course of financial remedy proceedings, whether that be before or after an agreement between the parties has been reached. 

Applications to set aside a financial remedy order can only be made in specific circumstances. As is demonstrated by this recent case, such applications are not always successful, particularly in light of the court.

If you are thinking about starting divorce proceedings, getting early legal advice can ensure you are not left in a similar situation. Our expert divorce lawyers are available for a free, no obligation 15 minute conversation to see how we can help you. 

I can be contacted on 01245 453827 or [email protected].

*Recent case S v T [2021] EWFC B11