Written by Xinlei Zhang.
The recent case of Sismey v Salandron [2021] 10 WLUK 372 illustrates the importance of having a clear break following a divorce settlement. It concerns a divorce settlement which was not effective during the parties’ lifetime, but only came into force by way of a will on one party’s death. What happened to such settlement when the relevant party died and his will which was supposed to implement the settlement had it been invalidated? Would such settlement still be able to be saved by the Court? Let’s look at this case.
Facts
The Husband purchased a property in his sole name, later married to the Wife in 1988. The Property was used as their matrimonial home during the marriage. There was a child, T, between the Husband and the Wife. The Husband formed a relationship with M in 2002, which led to the separation between the Husband and the Wife. In 2017, a Consent Order was approved by the Judge regarding their financial division, in which the Husband agreed to leave the matrimonial home (“the Property” hereinafter)e left to T on his death by way of will. Other agreed terms were the Wife would take the savings and a joint investment property; and the husband would retain his pension.
In 2019, the Husband remarried to M. He subsequently died on 8 January 2020.
Although the Husband did execute a will which reflected the divorce settlement between the couple in 2017, it was automatically revoked by his subsequent re-marriage to M, which means that the gift of the Property to T contained in the will was no longer valid. In the meantime, as the Husband did not execute another will before his death. He died intestate. As his spouse, M inherited the Husband’s estate, including the Property.
This was clearly out of T’s expectation (and the Wife). He made a claim against the Husband’s estate for the Property on the ground that there was a breach of the agreed divorce settlement. M counter claimed and argued that the divorce settlement was entered with the intention of defeating her future claim. Therefore, it is unenforceable. She also submitted that the Wife received greater value of assets than she would have achieved if they had been in divorce financial proceedings.
What did the Court decide?
The Court upheld the divorce settlement and dismissed M’s counter claim. . It was the Court’s view that the divorce agreement reflected the Party’s genuine intention. After the issuing of the consent order, the Property was simply held on trust for T by the Husband, which should not form part of this estate any longer and hence be passed to M on his death.
Comments
Although T eventually claimed back the Property, the costs of the proceedings and the delay therefrom cannot be ignored. If the legal title had been transferred to T with the Husband being a lifetime tenant or a lifetime trust regarding the Property had been set up in favour of T at the time of divorce, the subsequent litigation could have been avoided completely. This case demonstrates once again that it is advisable to obtain a clean break upon one’s divorce, because no one can foresee what might happen in the future, intended or not.
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