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Setting Aside Separation Agreements

There are often times when clients who are getting divorce manage to successfully agree a Separation Agreement in respect of finances. This is undoubtedly the best way to proceed. However, it is also an opportunity for those who perhaps are having difficult times or suffering psychologically to be taken advantage of. Often when this happens there can also be insufficient legal advice as well. When this happens people can sign away their matrimonial property rights without even realising what they've done.

Fortunately, there is a remedy. If you meet certain criteria you can apply to the Court to have aspects of or even the whole separation agreement set aside. This can free up a fresh negotiation or allow the Courts to make an order for financial provision. If it is not set aside neither can happen.

The main case for this is Gillon v Gillon (No.1) 1994 SLT 978 and (No.3) 1995 SLT 678. I won't go into the details of that case but 5 guidelines to setting aside can be taken from it:

  1. The contract should be assessed from the perspective of both fairness and reasonableness (although either fairness or reasonableness alone is insufficient to have the agreement set aside);

  2. All relevant circumstances leading up to and prevailing at the time of the execution of the agreement should be examined, including the nature and quality of any legal advice given;

  3. An unfair advantage taken by one spouse during negotiations may have a cogent bearing on the matter (this could be domestic abuse, the mental state of the disadvantaged party or numerous other issues);

  4. The Court however, will not be unduly ready to overturn agreements validly entered into; and

  5. The mere fact that an agreement turns out to be more advantageous to one party over another does not in itself make it unfair or unreasonable.

Examples of decisions are as follows:

- a failure to seek independent legal advice did not in itself result in a setting aside order, particularly when the aims of the separation agreement were actually achieved.

- failure to disclose a matrimonial asset when negotiating which was other wise fait did lead to it being set aside.

- The inability of a spouse to make appropriate decisions and negotiate due to a poor mental and emotional state was one of several factors justifying the setting aside of the agreement.

It is clear that separation agreements can be set aside. However, note that simply because it is seemingly unfair will not lead automatically to it being set aside. Each one will turn on its own facts.

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