Can unexpected events vary final court orders in respect of financial settlements?

March 25, 2021

Once you have decided to divorce your spouse or dissolve your civil partnership, you will need to agree the division of your financial assets. This agreement is incorporated into a consent order, which is a formal document approved by the court and once approved, it is a “sealed order” which is legally binding. The sealed order is final as soon as the decree absolute has been made.

It is possible in limited circumstances to apply to the court to vary the terms of the sealed order if the circumstances have changed since the order was made.

These circumstances were explored in the case of Barder vs Barder [1987] 2 FLR 480, where the sealed order provided that the husband would transfer the family home to the wife to live there with their two children. Unfortunately, she killed the children and died by suicide five weeks after the sealed order was made. As a result, the husband applied to the court to reverse the transfer of the family home. The court agreed because the purpose of the sealed order was to meet the needs of the wife and children and the circumstances had now removed this need.

This case developed the “Barder principle” which means that you can apply to the court to appeal the sealed order if the following factors apply:

1. An unexpected or new event has happened since the date of the sealed order which invalidates the reason why the order was made.
2. The new event occurred shortly after the sealed order was made by the court.
3. The application to the court to appeal the order is made reasonably promptly depending on the circumstances even if it is made out of time.
4. By allowing the appeal, no third parties would be affected by the changed outcome.

Therefore, if there is a sealed order but an unexpected event occurs, a party can apply to the court to appeal the order even if the application is made outside of the required timeframe for appealing. The new event must be unexpected and unforeseeable and the application to appeal the order should ideally be made within a few months of the unexpected event.

There have been lengthy discussions about whether the coronavirus situation could be treated as a “Barder” event, particularly in relation to fluctuations in property values and business profits. As a result, the financial settlement may be unfair if one party now holds assets that have drastically reduced in value, whilst the other party’s assets have retained their value, for example, if they retained a large amount of savings or other assets as part of the financial settlement.

In the case of Myerson v Myerson (No 2) [2009] EWCA Civ 282, an application was made to the court on the basis of the Barder principle, but the court found that it will not be a “Barder” event even if there are dramatic fluctuations in share prices and therefore the sealed order could not be varied despite a huge drop in the husband’s company valuation.

If you have a sealed order in place in respect of your financial settlement, it is unlikely that the court will agree that it can be varied unless one of the following apply, and even then, it is very case specific and will depend on your particular circumstances:

• Death, if it invalidates the basis of the order being made.
• Remarriage or cohabitation. For example, if the basis of the order, such as the party’s urgent need to rehouse, no longer applies because their housing needs are met due to their remarriage.
• Changes in housing needs, such as where the order is made on the assumption of a party’s greater housing needs because they are the children’s primary care, but this is later no longer the case.
• Inheritance.

The following will not usually be considered as a “Barder” event, but it is again very fact specific:

• Redundancy.
• Unemployment.
• Change in the value of an asset if it is the result of a natural change in value of the financial markets, even if it were a dramatic change that could not be predicted.
• One of the parties’ remarriage, although there could be an exception if it can be proven that the person had already intended to marry at the time the order was made but had hidden this intention.

Wallace Robinson & Morgan Limited are based in Solihull and Dorridge and serve clients across Birmingham and the West Midlands, Warwickshire, Worcestershire and further afield. Our team of Family Lawyers are happy to help if you would like advice about agreeing a financial settlement or beginning financial remedy proceedings.

If you would like to discuss your matter, please call 0121 705 7571 and ask to speak to a member of the Family law team or email us at family@wallacerobinson.co.uk.

This article is for general information purposes only. It does not constitute technical, financial, legal advice or any other type of professional advice and is no substitute for specific advice based on your individual circumstances. We do not accept responsibility or liability for any actions taken based on the information in this article. For more information, please click here.