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Home > Judgments > 2020 archive

CB v EB [2020] EWFC 72

A case concerning an application to set aside two consent orders - one from 2010, one from 2013.

This case concerned an application by CB, the husband ('H') to set aside two consent orders, one made in 2010 and one made in 2013 relying on facts which would not satisfy the traditional grounds for setting aside a final order.

It was argued on behalf of the applicant husband, CB ('H') that s.31F(6) MFPA alongside r.9.9A and PD9A, para 13, of the FPR 2010 were brand new provisions which represented a break with the past and "a brave new world" with respect the setting aside financial orders where the circumstances were exceptional. The key question for Mostyn J being whether the wording of FPR 2010 r. 9.9A and s. 31F(6) MPFA provided substantive jurisdiction to consider the set-aside application and to order a rehearing on the basis of new facts.

The facts

This was an 22-year marriage to separation. The parties had a traditional arrangement: H was the breadwinner and EB, the wife ('W'), was the homemaker. They had two adult children.

In 2010, a consent order was made by Baron J which provided for a broadly equal division of assets. This broadly equal division included the division of profits H was expected to receive upon the sale of two properties still in development at the time that the order was made. It was ordered that W was to receive her share by way of a lump sum following sale and to facilitate this her claims to a lump sum were left open. There order provided for the matter to be restored in 2012 in the absence of the properties being sold. In 2012, neither of the properties had sold and so W applied for enforcement and implementation of the 2010 order.

In 2013, a further consent order was made which provided that H would pay W two lump sums of £250,000 and £410,000. Upon the payment of the £410,000 lump sum, a clean break was ordered. These terms were complied with and the clean break therefore took full effect.

In 2016, one of the development properties sold for much less than anticipated. The other property was repossessed and was under offer at the time of the instant hearing. On the basis of these facts, H argued that in comparison to W he had been left in dire financial circumstances such that the 2010 and 2013 consent orders should be varied, a fresh s. 25 assessment undertaken and a lump sum payment of c. £3.5m made to him by W (equating to half of the matrimonial pot as he argued that it had now turned out to be). The consent orders had therefore provided for division of the matrimonial pot in a way that had turned out to be grossly unfair to H.

The decision

In considering this application, Mostyn J considered the circumstances in which financial orders could be varied or discharged both under s. 31 MCA 1973 and the common law. The circumstances which the common law had established that a review of a financial order might be triggered being:

(i) if there has been fraud or mistake: de Lasala v de Lasala [1980] AC 546;

(ii) if there has been material non-disclosure: Livesey (formerly Jenkins) v Jenkins [1985] AC 424;

(iii) if there has been a new event since the making of the order which invalidates the basis, or fundamental assumption, upon which the order was made: Barder v Caluori [1988] AC 20, [1987] 2 FLR 480;

(iv) if and insofar as the order contains undertakings: Mid Suffolk District Council v Clarke [2006] EWCA Civ 71, [2006] All ER(D) 190 (Feb);

(v) if the terms of the order remain executory: Thwaite v Thwaite [1982] Fam 1, (1981) 2 FLR 280 and Potter v Potter [1990] 2 FLR 27."

Mostyn J considered the history of section 31F(6) MFPA 1984 [21] – [37] in order to reach the conclusion that this section does not represent any great break with the past or usher in a new world. This section, he concludes, is but a replication of the power vested in the county courts in 1968 [55].

Mostyn J considered how the 'set-aside' provision had been interpreted in four key cases (CS v ACS [2015]; Sharland v Sharland [2015]; Gohil v Gohil [2015]; and Norman v Norman [2017]). All of these cases, he noted, confirmed the existence of a general set-aside power but did not suggest that it exercise should extend beyond the traditional grounds. He noted that in Norman, King LJ expressly rejected the submission by the appellant's counsel that under s. 31F(6) MFPA the court now had "unlimited" or "wide reaching" powers to set aside an order where there had been materially altered circumstances. He also noted that in Norman (at [49]), King LJ confirmed that for applications made after 3 October 2016 the application must be made under FPR r. 9.9A and not FPR r. 4.1(6).

In short, Mostyn J did not agree that s. 31F(6) taken together with r. 9.9A / PD9A, para 13 were brand new provisions which represented a break with the past and "a brave new world" with respect the setting aside financial orders. The proposition that section 31F(6) allows a challenge to a final financial remedy order to be mounted on grounds outside the traditional grounds, he stated, could not be supported in law [62]. He pointed with agreement to what is set out in Financial Remedies Practice 2020/21 (Class Publishing 2020) at para 4.32:

"The terms of rule 4.1(6) or rule 9.9A or section 17(2) of the Senior Courts Act 1981 or section 31F(6) of the Matrimonial and Family Proceedings Act 1984 do no more than to enable an application to set aside to be made under a ground of challenge recognised by the law as capable of being made at first instance rather than by way of appeal"

Mostyn J referred to the judgment of Gwynneth Knowles J in Akhmedova v Akhmedov & Ors (No. 6) [2020] EWHC 2235 (Fam) where at [131] she expressed the view that "Whilst the categories of cases in which r. 9.9A can be exercised are not closed and limited to those identified in paragraph 13.5 of PD9A, the jurisdiction to set aside is to be exercised with great caution, not least to avoid infringing upon the finality of judgments, subverting the role of the Court of Appeal, and undermining the overriding objective by permitting re-litigation of issues." He expressed his respectful disagreement with this view. In his uncompromising judgment is that the language of FPR PD9A para 13.5 is misleading, should not be read literally and must yield to the limitations set by the law to the scope of set aside grounds [61]. He states that in his view "there is no lawful scope for imaginative judges to unearth yet further set aside grounds. The available grounds are the traditional grounds, no more, no less" [57]. On this basis, he dismissed H's application.

Case summary by Rachel Cooper, barrister, Coram Chambers

 

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