D AGAINST D

Factual and Procedural Background

This case concerns financial provision on divorce between the Plaintiff and Defendant, who married in The City on 24 February 2011 and separated on 16 October 2019. The parties largely agreed on the valuation of matrimonial assets through joint minutes. A summons was served on the Defendant in January 2020, and a proof diet was assigned for 6 October 2020 to resolve disputes regarding the Defendant’s pension, the matrimonial home, and the valuation of LTIP A and B shares in Company B held by the Defendant. There was also dispute over periodical allowance. On the morning of the proof diet, following negotiations, the parties reached a compromise which was communicated by their agents via email.

Subsequently, the Plaintiff suffered a panic attack and disengaged from her legal agents, leading to a motion for a curator ad litem. Medical evidence indicated symptoms consistent with Post-Traumatic Stress Disorder, although no psychiatric diagnosis was made. The Plaintiff was self-represented at a further proof hearing in 2021, contesting the validity and fairness of the prior settlement.

The Court limited the issues for proof to whether the October 2020 compromise was valid and binding, and if so, whether it should be set aside for unfairness or unreasonableness under section 16 of the Family Law (Scotland) Act 1985.

Legal Issues Presented

1. Did the purported compromise reached in October 2020 constitute a valid and binding agreement between the parties?
2. If so, should that agreement be set aside on the basis of unfairness or unreasonableness under section 16 of the Family Law (Scotland) Act 1985?

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff contended that her state of mind was overwhelmed by stress and anxiety, including a panic attack shortly before the proof, impairing her capacity to settle.
• She alleged that the Defendant used knowledge from a prior divorce to inflict emotional distress, and that the settlement was agreed to under duress and was not valid or binding.
• The Plaintiff argued that she had not received proper legal advice covering key financial conduct by the Defendant, and that the volume and timing of documents prejudiced her ability to settle fairly.
• She maintained that the shares in Company B should be valued at 50% of their exit value and that no draft minute of agreement was presented to her for consideration after leaving her solicitor’s office.
• The Plaintiff sought a one-off capital payment and the expenses of the entire action dating from the service of the summons.

Defendant's Arguments

• The Defendant submitted that the Plaintiff gave clear instructions to settle on 6 October 2020, supported by credible evidence from the Plaintiff’s former legal representatives.
• It was argued that there was no evidence of lack of capacity, with any such issue requiring psychiatric evidence which was not provided.
• The Defendant denied allegations of fraud, perjury, and domestic abuse, and asserted the mortgage holiday application was legitimate.
• The Defendant contended that the settlement was reasonable and rational in light of the risks, including the uncertain valuation of the shares due to the Covid-19 pandemic’s impact on the airport business.
• Counsel emphasized the importance of parties being able to compromise litigation and that the section 16 jurisdiction was not engaged in this case.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court accepted the Plaintiff’s evidence of stress and panic attack but found significant discrepancies and lack of credibility in her account, particularly concerning her conduct and mental state on the morning of settlement. The Court preferred the evidence of the Plaintiff’s former legal advisors who observed the Plaintiff to be engaged, in control, and capable of giving instructions.

The Court held that the Plaintiff gave clear instructions to settle and that no medical evidence from a psychiatrist was provided to challenge capacity. The clinical psychologist’s report was insufficient to establish incapacity.

The Court found no evidential basis that the Plaintiff’s consent was vitiated by duress or mental/emotional incapacity. The stress of litigation was acknowledged but did not amount to duress. The professional advice was competent and comprehensive, and the compromise was a rational resolution of contested issues.

Regarding the valuation of shares, the Court noted the substantial uncertainty caused by the Covid-19 pandemic’s impact on the airport business, rendering valuations inherently speculative. The B shares were not matrimonial property and thus largely irrelevant except possibly for economic disadvantage.

The Court concluded that the exceptional jurisdiction under section 16 of the 1985 Act to set aside agreements for unfairness or unreasonableness was not engaged. The compromise was reasonable, reflecting a balanced meeting point between the parties’ positions.

Holding and Implications

The Court sustained the Defendant’s plea-in-law, repelled the Plaintiff’s plea, and pronounced a declarator in favour of the Defendant confirming the validity and binding nature of the October 2020 compromise.

The Court dismissed the Plaintiff’s challenge to the settlement and ordered the parties to make submissions regarding the final disposition of the divorce. The decision does not dispose of the divorce itself but confirms that the financial settlement is binding and not subject to being set aside for unfairness or incapacity.

No new legal precedent was established; the ruling emphasizes the importance of clear instructions and competent legal advice in financial provision on divorce and affirms the limited scope of section 16 to set aside settlements.