Separation? Don’t look back in Anger? – When can Financial Orders can be revisited

Insights - 16/12/2015

Most couples go through many months of blood, sweat and tears to reach an agreement regarding their finances following separation.  In most instances the agreement is formalised by the court, by it making a final order or an order by consent of the parties. These are usually final, legally binding documents, but when does usually no longer apply?

The case of Barder v Barder set out some narrowly defined circumstances in which the content of a consent order can be revisited after the 28 day period for appealing it has expired. In this case the husband transferred his interest in the marital home to the wife, who was to be the primary carer for the children. Within five weeks of the order, tragically the wife killed the two children before committing suicide. Her estate would have passed to her mother under her will. The husband applied to set aside the order made transferring the house to the wife.  This very sad an unforeseen event, which occurred shortly after the parties agreed an order settling their claims invalidated the fundamental assumption the order had been agreed upon, that the wife would live with the children in the house for a long period of time The husband succeeded in his appeal which meant he was entitled to revisit the terms of the order.

The issue of whether an unexpected windfall satisfied the ‘Barder Test’ arose in the case of Critchell v Critchell. In this instance, the husband was given a 45% share of the net proceeds of the former marital home to pay off his debts. Within a month of the consent order being finalised, Mr Critchell’s father died, leaving him a £180,000 inheritance. The Court of Appeal held that this case came within the scope of the ‘Barder Test’. Mr Critchell’s charge on the property was removed as he no longer needed the money from the sale of the house as he could use his new found inheritance to pay off his debts.

The issue of whether price fluctuation of an asset constitutes a ‘Barder Event’ has arisen in numerous cases, particularly in the wake of the 2008 economic crash. The judgement in the case of Cornick v Cornick stated that court should not find there had been a ‘Barder Event’ when the value of shares sharply increased after the order had been made final. The rationale was that an increase in the share price was a natural event, and if the court intervened, it would create a precedent which opened the floodgates.

It is not only a ‘Barder Event’ that can allow someone to revisit the terms of an order. Providing incomplete or false financial disclosure can result in the order made being set aside. In two recent cases Alison Sharland and Varsha Gohil were found to be victims of fraudulent misrepresentation when their ex husbands deceived them as to their true wealth. The Supreme Court unanimously allowed the applications of these two women to set aside the orders made where their husband’s had not provided full and frank financial disclosure during the proceedings. Both women will have the opportunity to have their settlements reconsidered at fresh proceedings.

It is clearly very important for the parties to a divorce that there should be finality in the litigation. However, when events intervene that are so exceptional that the basis upon which the agreement was made is completely invalidated, the court has the power to review the order made.

If you require any advice or assistance on any of the issues raised in this blog please contact a member of our family team

Disclaimer:

Although correct at the time of publication, the contents of this newsletter/blog are intended for general information purposes only and shall not be deemed to be, or constitute, legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article. Please contact us for the latest legal position.

Categories