The final word

The recent case of Vince v Wyatt struck terror into the hearts of many an ex-spouse. The court allowed Mr Vince's ex-wife to bring a financial claim against him, in excess of 20 years after they had not only separated, but gone through the procedure of divorce.

While the value of Mrs Wyatt's claim is yet to be determined, the fact that the door was not automatically shut after such a long period of time, has passed and both parties agreed that they had been 'penniless' at the time of the divorce, mattered not.

Nervous ex-husbands (it is often the ex-husband) need to recall whether the DIY divorce had also included a finalisation of the financial claims.

The number of divorces with no accompanying financial claim has been steadily growing, reaching 50,000 in 2012. But even if financial proceedings were brought at the time of the divorce and, either compromised by consent or were the subject of a court ruling, when is a final order, final?

Disraeli's oft-quoted comment that 'finality is not the language of politics' may also, it seems, be true of certain parts of the legal system.

In the family court, once an order is made, there are only limited ways of having it overturned, altered or set aside.

Income and maintenance claims are always up for grabs in the absence of a strict cut-off. Both the husband and wife have the protection and/or risk that the amount of maintenance may be varied upward or downward, depending on the change in the parties' financial circumstances. A variation of maintenance claims would often take place following a lengthy period of unemployment for example, or the arrival of a new partner.

Capital claims, those dealing with,
for example, the payment of a large lump sum, are different. Even though a final order has been made (by consent or otherwise), the court maintains the power to interfere in cases of fraud, mistake or non-disclosure, but how often is it prepared to do so in practice?

Cohabitation

The courts are often asked to consider, in the absence of any provision, what the effect of cohabitation should be on the face of the order. In considering the type of order the parties want, both have to take into account the risk associated with swapping, where possible, ongoing maintenance claims against the payment of a significant capital sum to buy out those claims and to obtain finality.

Cohabitation of itself will not always be taken into account as grounds for interfering with an existing order.
Both must assume the risk. Ex-husbands should do what they can to 'encourage' their former wives to form a lasting bond with a very wealthy suitor, rather than a penniless toy boy.

Fraud

The court has decided that to have an order overturned on the basis of fraud carries a high burden. It requires that there must be a material difference between the fraudulent evidence and the new evidence, such that it 'entirely changes the nature of the case', (de Lasala v de Lasala [1980] AC 546). Furthermore the new evidence must establish that 'distinctly more probably than not' the fraudulent party wilfully made a statement which they knew to be false.

Mistake

Mistake at the time an order is made can also be a vitiating factor but again, as in allegations of fraud, not every mistake will justify setting aside an order. The Court of Appeal (CoA) has considered the circumstances in which orders should be set aside on the grounds of 'mistake'.

It is very reluctant to do so even when there was a significant mistake as to the value of the total asset. The CoA has previously refused to allow the ex-wife to reopen an order to receive a higher award, as events did not turn out as they hoped.

Similarly it said the husband would also be unable to claim refunds from the wife simply because there had been such a mistake. The court will, in certain circumstances, take into account mistakes, but only where the party seeking to rely on the mistake is blameless.

Non-disclosure

Parties in financial proceedings relating to divorce have an ongoing obligation to provide 'full, frank, and clear disclosure of all material facts, and keep such disclosure up to date until the final disposition of the case by the court' (Livesey (formerly Jenkins) v Jenkins [1985] 1 AC 424). Even so, not every case of non-disclosure will result in an order being set aside as in Livesey.

The court emphasised that the absence of full and frank disclosure must have led to an order being made which is 'substantially different from the order it would have made if disclosure had taken place'. In Livesey, the wife did not disclose the 'small matter' of her engagement and remarriage, at the time she entered into a financial consent order.

Protection for the hoodwinked

In certain circumstances, the court will offer protection to the party who has been hoodwinked. In the case of Bokor-Ingram v Bokor-Ingram [2009] EWCA,
the CoA was willing to set aside the order when, only within two weeks of the consent order being made, the husband resigned from his employment and signed a new contract of employment with a guaranteed and significantly higher remuneration.

He had not advised the wife that he had been in negotiations to seek a new contract. Although the wife's appeal was compromised, the CoA stressed that,
in its view, if the husband had disclosed the proximity of a new contract of employment, then it was 'inconceivable' that the wife would not have 'raised her sights'. As with all cases in the family division, the matters turn on their very specific facts.

Supervening events

What happens then, when a perfectly reasonable and fair order is made and there is then some 'supervening event' known as the Barder principle?
This follows from Barder v Barder [1987] 2FLR480, where it was ordered (by consent) that the wife should have the matrimonial home transferred to her absolutely, so as to provide a home for her and the children. Sadly, some five weeks later, the wife killed the children and then committed suicide.

The court emphasised that, as in this instance, the supervening event happened close to the making of the order and no third parties would be prejudiced by allowing the order to be revisited.

A lucky break

While the Barder case itself involved an extreme supervening event following the economic recession, the court had to become more familiar with dealing with often quite stratospheric changes in the value of assets.

In Conic v Conic [1994] 2FLR, the court gave guidance as to how it would deal with price fluctuations. In Conic the wife was awarded a 51 per cent share of the matrimonial assets, and the husband's shares rose dramatically in value from £2.17 to £12.58 per share, within a few months. The wife's share of the assets correspondingly fell to approximately
20 per cent.

The judge indicated that this was not a Barder event because fluctuations in value arose as a result of a 'natural, albeit dramatic change in value'. We have already looked at mistake as to value but, more importantly, something unforeseen may happen after the date of the hearing, as in the Barder principle.

Sudden misfortune

In Myerson v Myerson (No.2) [2009] EWCA, the court held that although the value of the husband's shares fell dramatically from £2.99 when the order was made, to less than 28p at the time of his application to the court, the shares fell within a natural variation.

Similarly the loss of employment is unlikely to be taken into account as a Barder event. The judge described unemployment in the case of Maskell v Maskell [2001] EWCA as 'something that hundreds and thousands of breadwinners … have to face'. Even the ultimate finality (death) will not always constitute a Barder event. Each case is fact specific.

A 'final' order

So the court strives for, and indeed is under an obligation in each case to consider, whether the parties should have a financial order that provides both with a 'clean break' from each other.

Economically this is not always possible and even when both parties believe that finality has been achieved, there are a number of ways of revisiting 'final' orders, albeit the court has set the bar pretty high. n

Teresa Cullen is a partner and family lawyer at Fladgate