Under what circumstances can a divorce agreement be (partially) annulled due to fraud?

A divorce agreement is a document in which you and your partner record the agreements you have made regarding the divorce. Based on recent case law, I would like to explain to you i) under what circumstances such a divorce agreement can be annulled and ii) whether it is possible to partially annul a divorce agreement.

Annulment of a divorce agreement due to fraud

Arnhem-Leeuwarden Court of Appeal 12 February 2019 (ECLI:NL:GHARL:2019:1298):

The parties were married in community of property. In March 2014, they entered into a divorce agreement. In it, they agreed on 31 December 2012 as the reference date for the composition and size of the community. The community of property included the husband's shares in his BV. At the time the divorce agreement was signed, the husband was in the process of selling his entire shareholding. He expected a return of approximately 20 million euros. This was not told to the wife at the time. She says that according to the husband, the value of the shares in his BV at the end of 2012 did not differ much from the value at the time the divorce agreement was signed (March 2014). The wife later understood that this was different and requested partial annulment of the agreement. The district court and the court of appeal honored the wife's plea of fraud and partially annulled the divorce agreement.

This ruling implies that a divorce agreement can be annulled if it was created under the influence of a so-called 'defect of intention'. Defect of intention is a concept that briefly indicates the situation in which the intention to perform a legal act is defectively formed. The law names four defects of intention, namely i) threat, ii) deception, iii) abuse of circumstances and iv) error.

For a divorce agreement to be annulled on the grounds of fraud, the following three conditions must be met:

• First, there must be a trick. This can be: i) an incorrect statement, ii) silence where speaking was mandatory or iii) another trick. The term trick must be given a broad meaning. In other words, any misleading behaviour and any deceptive act or omission can be considered a 'trick'. In the case described above, the court is of the opinion that the man used various tricks with the aim of getting the woman to agree to the terms of the divorce.
• Secondly, there must be intent on the part of the deceiver. In this context, the court states that spouses must provide each other with correct and complete information regarding the division of the marital property community about the goods and debts that have fallen into the community on each side. In the present case, this means that the man should have informed the woman of all developments on his own initiative up to the date of signing the divorce agreement.
• Thirdly, there must be a causal connection between the trick and the legal act. In other words, that one is a logical consequence of the other. In this case, the court ruled that it was sufficient that the woman would not have concluded the agreement, or not on the actually agreed terms, if she had known what was really going on.

Finally, it is important that legal actions to annul a divorce agreement can expire. In the event of an appeal to fraud, a limitation period of three years applies. This period starts at the moment the fraud is discovered.

Partial annulment of a divorce agreement

Conclusion AG 15 May 2020 (ECLI:NL:PHR:2020:487) and Supreme Court 16 October 2020 (ECLI:NL:HR:2020:1632):

The man and the BV went to the Supreme Court. They believe that the divorce agreement cannot be partially annulled, because the provisions on the division of the community of property are inseparably linked to the rest of the divorce agreement. They point out that the statutory provision on fraud stipulates that a divorce agreement can only be annulled in its entirety. The Supreme Court does not agree with the man and the BV.  

In principle, it is correct that the statutory provision on fraud does not literally provide for the possibility of partially annulling a divorce agreement. However, this does not mean that part of the divorce agreement cannot continue to exist after annulment on the grounds of fraud. This is evident from the following legal provision: “If a ground for nullity concerns only part of a legal act, it will remain in force for the rest, insofar as this is not inextricably linked to the null and void part, taking into account the content and scope of the act.” In other words, it must be examined whether the part of the divorce agreement that is affected by nullity is inseparably connected to the remaining part. If that inseparable connection does not exist, the rest of the divorce agreement can remain in force.

In short, the person who is authorised to annul may direct his claim to a part of the divorce agreement. The other party can then argue that there is an inseparable connection with the rest of the divorce agreement and argue that the entire divorce agreement must be declared null and void. The latter was not claimed in this case by the man and the BV.

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