When couples are divorcing, mediation is strongly recommended in order to reduce the time and expense involved in court proceedings. This was amply illustrated in a recent case in which the Family Court refused a husband’s application to strike out an application by the wife to set aside a financial remedy order on the ground of the husband’s misrepresentation.

During the financial remedy proceedings, the marital element of the husband’s interest in private equity funds had been calculated based on the period between the establishment of the funds and the date of the trial, as a percentage of the total time between the funds’ establishment and their closure. It was undisputed during the proceedings that one of the funds had commenced operations in 2017 and would close eight years later, in 2025.

However, the fund had actually begun operating in 2015 and would close in 2023. The percentage of its value that the wife received had therefore been undercalculated. The wife subsequently applied to set aside the financial remedy order.

The husband sought to strike out that application, asserting that he had produced documents giving 2023 as the closing date of the fund and that, had the wife conducted appropriate due diligence, she would have known the correct date. He claimed that her application was an abuse of process and had no real prospect of success.

The Court found that the husband could not put the burden of discovering the error onto the wife. A number of documents and his evidence during the hearing had given the incorrect date, and the Court observed that the fund was his and he was the one who should know.

The wife could and should have brought her application earlier, and had unnecessarily extended the litigation by not doing so. However, it was common ground that she had ended up with a smaller award than she would have done had the husband not provided incorrect information. In the circumstances, the Court concluded that it should not strike out the wife’s application as an abuse of process.

The Court also rejected the argument that the wife’s claim had no real prospect of success. Her argument that the husband must have been aware of the misrepresentation given that steps had been taken to establish a continuation fund within months of the financial remedy proceedings, amongst other factors, meant that the wife had an arguable case.

The husband’s strike-out application was dismissed. Observing that the case was one that ‘cries out for mediation’, the Court adjourned the proceedings so that mediation could take place.