When is a final order not a final order?
10 August 2015 by Simon Osborn
Orders setting out financial settlements following divorce are intended to be final. But what happens if an event occurs after a final financial order that fundamentally alters the basis upon which the order was made? Since the leading case of Barder v Calouri in 1988 it has been possible to appeal against a financial order in such circumstances. Whilst rarely used, and rarely successful if used, the case of Critchell v Critchell recently made the news because of a successful appeal leading to a ‘Barder’ finding.
There has now been another case that neatly explains how this type of appeal can be used.
As with many cases involving this type of appeal, the facts in the case of WA v Executors of the Estate of HA & Others were tragic. The case concerned a husband and wife, who were married in 1997 and had three children together. The wife was considerably more wealthy than the husband. Unfortunately, the marriage broke down early in 2014 and the husband took the breakdown very badly. The parties separated and divorce proceedings took place.
Terms of a financial settlement were agreed and in November 2014 a financial consent order was made in the divorce proceedings which provided for the wife to pay to the husband a lump sum of £17.34 million. Twenty-two days after the order was made the husband committed suicide. Shortly afterwards, the wife made her Barder appeal. She argued that the fundamental assumption upon which the order was made was that the husband required the money to meet his own needs, which had been totally invalidated by his death. She said that the whole order should be set aside and that she should be repaid the monies which had already been paid.
The appeal was heard by Mr Justice Moor who had to decide whether the four conditions required for a successful Barder appeal had been satisfied. He found that there was a real prospect of the appeal being successful, that the new event occurred within a relatively short time of the order being made, that the application for leave to appeal was made reasonably promptly and that the grant of leave to appeal had not prejudiced third parties who had acquired any interests in property in good faith and for valuable consideration.
Mr Justice Moore then needed to determine whether the husband’s death was foreseeable. If it had been, then that should have been taken into account when the order was made. It was argued on behalf of the husband’s estate that, in the light of the husband’s state of mind, it was not unforeseeable. However, Mr Justice Moor found that the husband’s suicide was not foreseeable. If it had been foreseeable the wife would not have agreed to pay such a sum.
In light of this, the conditions in Barder having been met, Mr Justice Moor had to decide what order was now appropriate? He considered what order would have been appropriate if he had dealt with the case in November 2014 when the original settlement was agreed, being aware that the husband would die shortly afterwards. He said that he would have considered both sharing and needs. He said that based upon the sharing principle a lump sum of £5 million would be appropriate. He rejected the argument that the husband had no needs and said that it was reasonable for there to be an award to enable the husband to make bequests and that £5 million would not have been inappropriate.
Accordingly, the wife’s appeal was allowed and the lump sum was reduced from £17.34 million to £5 million.