Brack v Brack

Factual and Procedural Background

This judgment concerns an application by the Wife to set aside a previous finding from December 2016 that no vitiating factors were present when the parties entered into three prenuptial agreements. The Wife seeks a finding that vitiating factors existed, which would negate the effect of those agreements. The Husband applies to strike out this set-aside application on grounds of abuse of process and undue delay. The application was filed in December 2019 and heard remotely in May 2020 due to the Covid-19 pandemic.

The background to the case involves a financial remedy dispute following the parties' marriage and prenuptial agreements signed in 2000. The Wife had previously applied for financial remedies, with a judgment delivered in December 2016. The Wife appealed, and in December 2018 the Court of Appeal ruled that the maintenance prorogation clause was invalid and that the Wife’s sharing claim was not inevitably lost due to the prenuptial agreements, remitting the case for further determination. The parties have incurred substantial legal costs exceeding two million pounds, representing a significant portion of their net assets.

At the 2016 hearing, the court found the Wife was not frank and preferred the Husband’s evidence denying misrepresentations inducing the prenuptial agreements. The Wife now relies on two emails from 2015, exchanged during divorce proceedings, which were not part of the original evidence. These emails allegedly show the Husband made financial promises contrary to his earlier denials.

Legal Issues Presented

1. Whether the Wife’s application to set aside the 2016 finding that no vitiating factors existed in relation to the prenuptial agreements should be struck out as an abuse of process or due to delay.
2. Whether the "new" evidence consisting of emails exchanged in 2015 is admissible and sufficient to establish that the Husband made misrepresentations or promises that would vitiate the prenuptial agreements.
3. How the principles established in Takhar v Gracefield Developments and the concept that "fraud unravels all" apply to the admission of fresh evidence and setting aside judgments in this context.
4. The applicability and distinction of the precedent set in The Coca-Cola Company v Ketteridge regarding timing and acquiescence in strike out applications.

Arguments of the Parties

Wife's Arguments

• The Husband made representations at the time of the prenuptial agreements that they would not be used to the Wife’s disadvantage and that she would be financially looked after.
• The emails from 2015 constitute new, decisive evidence demonstrating that the Husband made such financial promises, negating the effect of the prenuptial agreements.
• The Supreme Court decision in Takhar v Gracefield Developments establishes that fraud unravels all and fresh evidence of fraud allows setting aside a judgment irrespective of delay, unless there was a deliberate decision not to rely on the evidence previously.
• The refusal by the Court of Appeal to admit these emails as fresh evidence was based on the law at the time, which has since been superseded by the Supreme Court.

Husband's Arguments

• The Wife’s application is an abuse of process and should be struck out due to significant delay in bringing the application and failure to rely on the emails at the original hearing despite having possession of them.
• The emails post-date the prenuptial agreements by many years and are not contemporaneous evidence of the alleged misrepresentations at the time of signing.
• The Wife made a deliberate decision not to rely on the emails originally, as shown by differences between two signed statements, one of which contained references to the emails and the other which did not.
• The Court of Appeal refused permission to admit the emails as fresh evidence, citing the public interest in finality and the absence of good reason for delay, which remains applicable.
• The precedent in The Coca-Cola Company v Ketteridge is distinguishable because, unlike that case, there has been no acquiescence by the Husband and the litigation was effectively on hold.
• The Supreme Court decision in Summers v Fairclough Homes Ltd on strike out powers is not applicable to the facts of this case.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by considering the procedural propriety of hearing the strike out application before the substantive set-aside application, concluding it was logical and appropriate given the arguable case for strike out. The court rejected the Wife’s claim that the strike out application was an abuse of process or unfairly unadvertised.

The court distinguished the precedent in Ketteridge, emphasizing the different factual context, particularly the absence of acquiescence by the Husband and the litigation being on hold pending further hearings.

The court reviewed the "new" evidence—the 2015 emails—and noted their lack of contemporaneity with the 2000 prenuptial agreements, instead reflecting communications during ongoing divorce proceedings. The court acknowledged the dispute over their admissibility, including claims of without prejudice privilege, but accepted them de bene esse for the strike out application.

Applying the Supreme Court’s ruling in Takhar, the court recognized the principle that fraud unravels all and that fresh evidence of fraud can justify setting aside a judgment regardless of delay, unless there was a deliberate decision not to rely on the evidence. The court found, on the facts, that the Wife had deliberately chosen not to rely on the emails or related statements at the original hearing and during the long period thereafter, including an unsuccessful attempt to admit the evidence at the Court of Appeal.

The court identified multiple unexplained delays and deficiencies in the Wife’s case regarding why the evidence was not previously presented, including failure to seek to reopen evidence or invoke relevant procedural jurisdictions in the months following the 2016 hearing.

Consequently, the court concluded that the Wife’s application was fatally flawed and should be struck out. Even if discretion were available to admit the evidence, the court would exercise it against admission due to the delay and lack of adequate explanation.

The court also considered the Summers v Fairclough Homes precedent but found it inapplicable to the present circumstances.

Holding and Implications

The court granted the Husband’s application to strike out the Wife’s application to set aside the 2016 finding.

The direct effect of this decision is that the Wife’s attempt to reopen the factual findings regarding the prenuptial agreements on the basis of the "new" evidence is dismissed, preserving the finality of the original judgment. The court emphasized the importance of finality in litigation and the need for parties to present their full case in a timely manner. No new precedent was established beyond the application of existing principles concerning abuse of process, delay, and admission of fresh evidence in the context of allegations of fraud.