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S v T [2021] : Setting aside a final financial remedy order - Barder event or not?

There was a bit of heat in this case, nothing to do with both parties being qualified Barristers I’m sure !  But the judge described matters thus - these rival applications have fuelled an expensive and hot tempered feud !

Now to the facts.  Cohabitation began in 2005, the parties married in 2007, had two children, and they separated in January 2019. The assets included the marital home [MH] which was a flat, studio flat A, studio flat B (W’s French family property was excluded)

On 26 February 2019 the divorce petition was issued together with a form A. The matter proceeded to an FDR on 13th September 2019.

At FDR an agreement was reached:-

  • FMH to W with a
  • £300,000 lump sum to H (with an expectation that money would be raised by using the MH as security)
  • studio A to H,
  • studio B to W,

A Xydhias agreement was drawn up as there was no DN.

On 8th November, in advance of an order, W transferred studio A to H.

On 12th November 2019 a draft order was produced, which was approved on 21st November 2019.

Earlier and between those two dates there was concern raised by the lenders that the MH was affected by poor cladding (Grenfell style), which affected its value.  Both parties though, went forward thinking the £300,000 could be raised, W being open about any dealings she had with the lender.  A valuation report eventually went as far as to say nil value.

On 4th August 2020 H issued an order for enforcement, and on 28th September 2020 W issued an application to set aside the order, heard on 10th and 12th February 2021.

HHJ Hess’s view was that before approval of the order W could have called upon for the difficulty to be sorted out saying:-

           

            ‘It would have been very likely to allow her to decline to approve a consent order, it being a good candidate for being an Edgar vitiating factor as “an important change of circumstances, unforeseen or overlooked at the time of making the agreement”: see Edgar v Edgar [1980] 1 WLR 1410.'

W wanted to adhere to the agreement, rather than risk H pulling out and going for a sale of the MH (which might have been difficult one has to say); the wife hoped for the best.

The judge found it odd that there was no default order for sale of the fmh in the order, but was of the view he could order a sale under section 24A(4)[1].

The judge reviewed his powers of varying/discharging the undertaking W had given.

The judge cited Mostyn J extensively in DB v DLJ [2016] EWHC 324, which entertains concepts of unforeseen events, known unknowns, mistake, forseeability and supervening events.

The judge reminded himself of FPR 2010 Rule 9.9A and PD9A paragraph 13, which means that a setting aside application should now be made to the first instance, rather than to the appellate, judge.

He started by considering whether or not the wife has persuaded him that this case meets the ‘setting aside’ test as at the date of the order not the Xydhias (FDR) agreement.

He reflected on the importance of finality in financial remedy stating ‘the circumstances must be truly exceptional before a capital settlement can be re-opened.’

He decided it was more a mistake than a Barder event because the defect was known at the time of the order.

It is a known unknown - “at the time of the order a thing is known and assumed but in fact later eventuates to an extent that was not expected…Plainly it is very difficult to satisfy the test of unforseeability in such a case”

The judge declined Counsel’s request to set aside the entire order.  H wanted an order for sale, W wanted to adhere to the order as far as possible.

HHJ Hess said ‘It is my view here that there is an ‘alternative mainstream relief’ which has the effect of ‘broadly remedying the injustice caused by the absence of the true facts’.

The judge then did an outcome fairness evaluation of what each party wanted and decided to make an order for sale, but delaying its implementation on terms which give a reasonable opportunity for the cladding problems to be sorted out, saying ‘that scenario was most likely to give both the husband and the wife some prospect of a reasonable financial future and avoids most hardship overall’.

He requested counsel to draw up terms (as usual), reflecting that as far as costs go it was a ‘score draw’.

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[1] The judge said Section 24A(4), permits the court to direct that the sale should only be at the time of ‘the occurrence of an event specified by the court or the expiration of a period so specified’. I therefore have the jurisdiction to make an order for sale now under Section 24A, but also to delay its implementation for such appropriate period as I think fit, citing Lord Wilson in Birch v Birch.