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All Change: When does a change in family circumstances give rise to a successful appeal of a Financial Order in Family Proceedings?

  • September 22, 2015
  • By Hunters Law

Over the summer the Courts have had cause to look at two cases where one of the parties has sought to appeal a Final Order in Financial Remedy Proceedings because of a dramatic change in family circumstances.

In the case WA v Executors of the Estate of HA (deceased) [2015] EWHC 2233 (Fam) a “fabulously wealthy” wife in her early 40s sought to appeal a financial settlement that she and her estranged husband had agreed following negotiation. It had been a long marriage producing three children and although both parties had made a significant contribution to the marriage in their own ways, almost all of the financial contribution to the marriage had been made by the wife.  As part of their financial settlement it had been agreed that the husband would retain his own assets and was to receive a lump sum from the wife of £17.34m, payable in two tranches.  The wife paid the first tranche but 22 days after the Consent Order approving their financial settlement was made, and before payment of the second tranche, the husband tragically committed suicide.  He left his entire estate to his brothers together with a letter saying that none of the lump sum was to be repaid to his wife.

Needless to say the wife appealed the Final Order on the basis of the well-known authority of Barder -v- Barder (Calouri intervening)[1987]2 FLR 480 which established that in certain very limited circumstances an Order as to financial provisional remedies could be re-opened shortly after it was made, even if it was correctly made at the time.  The conditions for satisfying the “Barder test” are that:

  • The new event falsifies the assumptions on which the original Order was made so that an appeal would almost certainly succeed;
  • The new event happened so soon after the original order;
  • The proposed Appellant acts very quickly; and
  • Innocent third parties are not prejudiced.

The wife argued that the award to the husband had been based upon his need as it was perceived at that time, including, inter alia, re housing for himself and his children when they spent time with him. It was also agreed that he would need to re house his mother who had been living in a property on the family estate. It was argued that his housing need was now invalidated by his suicide, which was entirely unforeseen and unforeseeable and, save for his mother’s need for a home (which he had met from the first lump sum payment), no innocent third parties were prejudiced by the Order being revoked. The husband’s estate argued that the death was not unforeseen and in any event he had a sharing claim against the wife’s resources in general, entirely separate from any claim on a needs basis. In essence, “He had earned his share”.

In his usual clear style Moor J considered whether, irrespective of the husband’s own housing and maintenance need, he would have had a separate need to make bequests to members of his family.  Moor J felt that even if it was known at the date that the order was made that the husband would not live long he would have considered that, after such a long marriage, he would have had a claim based on both needs and sharing. He went on to assess his claim to be in the region of £5m, which he felt was fair and therefore allowed the Appeal setting aside the second lump sum payment still due. The husband’s estate was ordered to pay back any balance over £5m from the first lump sum.

Following this, in the recent case of Nasim -v- Nasim [2015] EWCH 2620 (Fam) the Courts again considered whether the Barder principles applied to a situation where a wife had been awarded roughly 70% of the net proceeds of sale of the former matrimonial home on the basis that she needed the equity to rehouse herself and the family’s two children, for whom she was primary carer.  The husband had good secure employment with a higher income and, therefore, a better mortgage capacity than the wife and her need to a larger share of the limited capital available to enable her and the children to re house was therefore felt to be greater.

Sadly six weeks after the Final Hearing there was an “incident” between the wife and the children which was described by the wife as nothing more than her waving a wooden spoon at their daughter.  Nonetheless, it resulted in the children moving home to live permanently with their father, so limiting the wife’s justification for a greater share of the net proceeds of sale on a needs basis.

In granting the husband leave to appeal the final Order, Holman J again considered the Barder principles. He referred to the fact that although the district Judge’s approach had been “painstaking and impeccable” in coming to his decision, it was undoubtedly the case that it was premised on a set of circumstances that no longer existed and that a change in the family arrangements created a new event. He therefore felt that an appeal against the original order would have a “real prospect of success”.

Interestingly the amount in issue on the proposed appeal was in the order of around £44,000 and the parties’ costs, once combined, could easily eclipse that.  The Judge, therefore, urged the parties to try and reach a negotiated settlement by agreement so that it could be dealt with in a cost-proportionate way and without the risk of any benefit being wiped out by their costs.

It is clear, therefore, that the Barder principles are still as valid today as they were in 1987 and, if there is a significant change in circumstances that could result in an unfair outcome then, as long as the Appellant acts quickly, there is a chance that an appeal would be successful.

Hetty Gleave 

Partner, Hunters 

 @Huntersfamlaw

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