When is a financial provision order not an order?

Standard financial orders

 

In his introduction to Practice Guidance: Standard Financial and Enforcement Orders of 30 November introduced by Ministry of Justice at  Sir James Munby P included the following of the financial orders:

 

These orders do not have the strict status of forms within Part 5 of the FPR 2010 and their use, although strongly to be encouraged, is not mandatory. Moreover, a standard order may be varied by the court or a party if the variation is required by the circumstances of a particular case. There will be many circumstances when a variation is required and departure from the standard form will not, of course, prevent an order being valid and binding. The standard orders should however represent the starting point…

 

‘Strongly to be encouraged, but not mandatory’: that is surely a correct assessment of the law?

 

If this is what Sir James truly believes to be the position in law, and not that this was something that was drafted by a civil servant and merely signed off by the President, then it is different from what Mostyn J asserts is the position in his administrative direction (wrongly described by some – eg Ashley Murray at 1331 [2017] Family Law – as a ‘judgment’) in CH v WH (Power to order indemnity) [2017] EWHC 2379 (Fam). Mostyn J claims that what he said was approved by the President. Either Mostyn J is misrepresenting the President; or the President is – most out of character – confused as to the law. His assertion of the status of the draft orders does not accord with what Mostyn J assrts to be teh position in CH v WH.

 

An order to procure release from a mortgage

 

In CH v WH [2017] EWHC 2379 (Fam) an uncontested consent order was remitted to Mostyn J for approval. The order derived from a draft consent order which was based on financial orders drawn up by the ‘Financial Remedies Working Group’ (FRWG; see Financial Omnibus Orders (the ‘omnibus orders’)). Under Mostyn J’s chairmanship of FRWG the omnibus orders were drafted. Mostyn J takes no account of what was said in Wicks v Wicks (below) of orders which are outside MCA 1973 (see eg his para [8] below).

 

Two district judges had refused to approve the parties’ order which included a requirement that each of them, on receiving a transfer each of two matrimonial properties from the other, should use their ‘best endeavours to procure the release of the other party’ from the mortgage on the property they respectively received. The two district judges thought that to order this – as the omnibus orders require – was outside powers under MCA 1973. They were correct; and force is given to their position by a Supreme Court decision in Birch v Birch [2017] UKSC 53, [2017] 2 FLR 1031.

 

Mostyn J overrode the district judges’ decisions with the words:

 

[10] In my judgment, these sterile, technical objections to orders in these terms must cease. They have caused needless delay and have no doubt increased costs and caused other inconvenience.

[11] That concludes this judgment, which the President has seen and which he approves.

 

Of the need to follow the provisions of MCA 1973 Mostyn J says:

 

[8] It is elementary that the court cannot make orders outside its powers: see Livesey v Jenkins [1985] AC 424 at 444G, where Lord Brandon stated that there was nothing in section 23 or 24 of the Matrimonial Causes Act 1973 which directly empowered the court to make the order requiring the wife, following the transfer of the matrimonial home to her by the husband, to be solely responsible for the mortgage and all other outgoings on it. Such a provision, he said, should have been incorporated in undertakings. It is certainly true that the literal words of section 23 and section 24 do not provide for the court to be able to make consequential or supplementary provisions of this nature, in contrast to the terms of section 24A(2), which explicitly grants such a power when making an order for the sale of property.

 

Inherent jurisdiction and the financial relief jurisdiction

 

What are the court’s inherent powers in financial relief cases? That is, what are the court’s powers outside the four corners of what is provided for under Matrimonial Causes Act 1973 (MCA 1973)? In Wicks v Wicks [1998] 1 FLR 470, [1998] 3 WLR 277 the Court of Appeal considered a judgement in which the first instance judge had awarded sale of matrimonial property and payment of a sum to the wife to enable her, pending a final ancillary relief hearing to buy property. This could not be done because of the variety of statutory provision already available to the courts under MCA 1973; nor could it be done under any inherent jurisdiction in the High Court.

 

Ward LJ (at 490) explained the inherent jurisdiction in words also referred to by Keehan J as:

 

In 1970 Sir Jack Jacob described the inherent jurisdiction of the court as ‘a virile and viable doctrine which in the very nature of things is bound to be claimed by the superior courts of law as an indispensable adjunct to all their powers’ ((1970) 23 Current Legal Problems 52). But in my judgment the inherent jurisdiction, valuable and beneficial though it is in its proper procedural sphere in relation to litigation, cannot be invoked by the court to arrogate to itself the power to give substantive relief, particularly so in an area so much controlled by statute.

 

In Wicks Ward LJ (with whom Peter Gibson LJ and Sir John Vinelott agreed) distinguished between procedural steps, where the court retained inherent jurisdiction, and ‘the power to give substantive relief’. In an area so set about by statutory powers – and with children and CA 1989 – creation of further substantive relief was not available to the courts:

 

The reality here is that the wife is seeking the enforcement of rights which MCA 1973 does not grant her. She wants an order for sale before s 24A allows the court to order it. She wants money to spend on a house before the financial and property adjustments can be made under ss 23 and 24. To submit… that she only seeks the ‘use of certain assets’ (the matrimonial home and the money) ‘pending trial’, and that this is not an interim lump sum order or an interim property adjustment order or an interim order for sale, because they confer ‘upon the recipient no absolute or exclusive ownership of the asset’ is disingenuous. She wants the money to buy a new home in her name, under her control, for her sole enjoyment to the exclusion of the husband. If the substantive law laid down by the MCA 1973 does not permit that to happen, then the court has no inherent jurisdiction to do that which Parliament has not granted it power to do….

 

In Birch Lord Wilson (with whom the majority agreed) said of an undertaking in an order:

 

[5] All three lower courts adopted without demur the wife’s description of her application as being to “vary” her undertaking. But her description betrays a conceptual confusion which it is as well to dispel as this early stage. An undertaking is a solemn promise which a litigant volunteers to the court. A court has no power to impose any variation of the terms of a voluntary promise. A litigant who wishes to cease to be bound by her (or his) undertaking should apply for “release” from it (or “discharge” of it); and often she will accompany her application for release with an offer of a further undertaking in different terms. The court may decide to accept the further undertaking and, in the light of it, to grant the application for release….

[6] In my opinion these proceedings have been bedevilled by a failure to distinguish between the existence of the court’s jurisdiction to release the wife from her undertaking (conditionally, on any view, upon her offering a further one in different terms) and the exercise of its jurisdiction….

 

The Supreme Court held that the wife in Birch could apply to the court to seek release from her undertaking. Whether she should be permitted to do so was a matter with which the lower court must deal. Her application was to be dealt with as equivalent to a MCA 1973 s 24A(1) variation of sale order within the terms of MCA 1973 s 31(7). Undertakings can be dealt with in this way. Different statutory provisions apply for orders; and these do not include release of parties from their undertakings under an order (as approved by Mostyn J in CH v WH).

 

Indemnity from payment of the mortgage in the Family Court

 

Mostyn J refers to his own ‘view’ (most judges would have warned themselves against making any decision in a context such as this, where their mind was already made up on a point, without argument against them). This was set out in the first report of the FRWG which justified including mortgage repayments as part of the order not as an undertaking (he quotes this in full in the case at [5] of CH v WH):

 

Under the new Matrimonial and Family Proceedings Act 1984 s 31E(1)(a) in any proceedings in the family court, the court may make any order which could be made by the High Court if the proceedings were in the High Court. The High Court has power to order or decree an indemnity. This is an equitable remedy originally vested in the Court of Chancery which was subsumed into the High Court by the Supreme Court of Judicature Act 1873. It was the very relief initially ordered in Salomon v A Salomon and Co Ltd [1897] AC 22 (but which was later set aside by the House of Lords as offending the rule about the separate legal personality of companies)….

 

Some might say that this explanation was ‘sterile, technical’ and obscure, with all respect to Mostyn J and despite the approval – he says – of the President.

 

It has also been suggested by other lawyers that Mostyn J’s treatment of equitable principle is wrong – again it must be recalled that the matter case was not argued before him – is wrong. Because the High Court has jurisdiction to grant a remedy, does not mean it can do so where the cause of action is, for example, ancillary to a cause under MCA 1973. In Salomon an indemnity was available because it was an implied term of the relationship of agency between company and company director. Similarly, the High Court has the power to award damages. It does not follow that it can do so in a case brought under MCA 1973.

 

Indemnity as part of an order: wrong in law?

 

Certainly equitable principle in ancillary relief proceedings was the sort of extra-statutory remedy attempted by Waite J in Barry v Barry [1992] Fam 140, [1992] 2 FLR 233 and disapproved of, and expressly overruled, by Court of Appeal in Wicks v Wicks (where, in this case, the simple remedy of incorporating the indemnity as part of a pre-curial part of the order could have been done). Agreeing with Ward LJ in over-ruling Barry, Sir John Vinelott summarised the inherent jurisdiction position in Wicks v Wicks at [1992] 1 FLR at 489:

 

What is clear is that, for the reasons set out in the judgment of Ward LJ, the claim that the court has an inherent jurisdiction to make an interim lump sum order or to direct the application of assets the subject of a claim for ancillary relief in the way suggested cannot be supported. Part II of the MCA 1973 contains an elaborate code governing financial provision and property adjustment orders which includes, in s 22, provision for maintenance pending suit; it would be remarkable to find that the court has a much wider inherent jurisdiction to make interim orders for lump sum payments or for the application of matrimonial assets for the benefit of one of the parties pending suit….

 

Birch dealt with undertakings and a parties’ release from them; and with how such undertakings might later be varied (a point not considered by Mostyn J). It is not known to what extent the standard orders have been redrafted since Birch or whether Mostyn J drew to the President’s attention that the order he had approved appears to breach Wicks and is probably contrary to the decision in Birch. He cited neither case to himself in CH v WH.

 

Oh and there is an old rule in English common law: that you cannot pick your judge. If Mostyn J was acting as a civil servant – in this case as civil servant in ‘forensic ferret mode’ (per Ward LJ in Harris v Manahan [1997] 1 FLR 205, CA) – so be it; but his decision has no precedent value. It is no more than persuasive, alongside the comments of Sir James Munby P in the introduction to the orders set out above; and to the extent that it has been made without regard to Birch and Wicks it is probably of very little value indeed.

 

If I were asked I would say that, as we have always done, practitioners put into undertakings in the pre-curial part of the order what cannot be done by order under Matrimonial Causes Act 1973. And, unlike Mostyn J, there is no need to go truffling around amongst obscure equitable remedies for recondite orders the court may or may not be able to make.

#Mediation: terms of an agreement or consent order

A ‘not particularly well drafted’ consent order

 

The recent case of Besharova v Berezovsky [2016] EWCA Civ 161 (http://www.bailii.org/ew/cases/EWCA/Civ/2016/161.html) has things to say, first, to any mediator or lawyer who seeks to settle financial issues between formerly married or cohabiting couples (though Besharova specifically applies only to married couples); secondly, to any lawyer (and any mediators?) who may be called upon to draft an agreement, Tomlin order or consent orders; and, thirdly, to any lawyer called upon to construe agreements or orders when they are found to be unclear.

 

Boris Berezovsky attracted a variety of litigation, especially in his declining years. Not long before his death in March 2013 he settled divorce proceedings in the Family Division on terms, set out in a consent order – ‘not particularly well drafted’, said Sir Stephen Richards – that his wife was to receive (1) the net proceeds of sale (after repayment to him or his estate of £16M) of a property and (2) sums of money from specified litigation. The property remains unsold, and no sale is in sight. A third provision was in issue: did the order provide a cap on what Mrs B was to receive at £200M; or did the cap only apply if she was paid out from the property before other payments were made, as an incentive to encourage the sale of the property?

 

The parties and the Court of Appeal – Sir Stephen gave the only judgement – agreed (see para [11]) that construction of the consent order was to be on the basis of Sirius International Insurance Co v FAI General Insurance Ltd & Ors [2004] UKHL 54, [2004] 1 WLR 3251 (http://www.bailii.org/uk/cases/UKHL/2004/54.html). In that case the House of Lords was asked to assert on what basis a Tomlin order should be construed. The court accepted that, for these purposes, a matrimonial finance consent order and a Tomlin order were equivalent.

 

The passage cited by Sir Stephen is of Lord Steyn in Sirrius:

 

[18] The settlement contained in the Tomlin order must be construed as a commercial instrument. The aim of the inquiry is not to probe the real intentions of the parties but to ascertain the contextual meaning of the relevant contractual language. The inquiry is objective: the question is what a reasonable person, circumstanced as the actual parties were, would have understood the parties to have meant by the use of specific language. The answer to that question is to be gathered from the text under consideration and its relevant contextual scene.

 

Commercial common sense: the flight from ‘literalism’

 

So, says Lord Steyn, in this context, lawyers must avoid ‘literalism’ and prefer an approach based on common sense and what the parties can be regarded as having intended:

 

[19] There has been a shift from literal methods of interpretation towards a more commercial approach. In Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191, Lord Diplock, in an opinion concurred in by his fellow Law Lords, observed (at 201):

“if detailed semantic and syntactical analysis of a word in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.”

 

‘Literalism’ should be avoided:

 

[19] … The tendency should therefore generally speaking be against literalism. What is literalism? It will depend on the context. But an example is given in The Works of William Paley (1838 ed), Vol III, 60. The moral philosophy of Paley influenced thinking on contract in the 19th century. The example is as follows: The tyrant Temures promised the garrison of Sebastia that no blood would be shed if they surrendered to him. They surrendered. He shed no blood. He buried them all alive. This is literalism. If possible it should be resisted in the interpretative process….

 

‘A sensible result’

 

Sir Stephen could see no justification for the interpretation urged upon him by Mrs B. He looked for what the parties must be thought to have intended:

 

[26] The construction that I favour produces a sensible result which the parties can readily be taken to have intended. It avoids the potential for a windfall benefit which arises on the wife’s construction. I can see no sensible reason why the parties should have intended the wife’s net entitlement under the Order to be potentially so much greater if the sale of the property and distribution of the proceeds of sale take place after rather than before litigation monies are received by the husband. I do not accept Mr Marks’s submission that the Order was structured in that way so as to incentivise the husband in relation to the sale of the property. There is no evidence before the court to show, by reference to the surrounding circumstances, that this may have been a purpose of the parties.

 

In Oakes v Johansson [2015] EWHC 2616 (Fam) Mostyn J considered an application by a father (in proceedings under Children Act 1989 Sch 1) where the parents’ consent order had not disposed of how arrears due under an interim order should be dealt with. Her ‘position as drafted by her leading counsel’ was that she ‘included a claim for discharge of the arrears’; but the consent order was silent. The mother – acing in person – had sought to enforce in the father’s home court in Sweden. Mostyn J does not assess the case on Sirrius, or comparable, principles. Without defining any ‘normal’ contract law or construction ‘tenets’ he held:

 

[9] It is true that the order does not on its face explicitly deal with the discharge of the earlier interim order, or deal with the question of any alleged arrears arising under it. However, the normal tenets of contractual interpretation, leave to me conclude without any doubt that it was the intention of the parties that the arrangements made in this final order would be in substitution for and supersession of the interim order, including any arrears that may have arisen under it….

[10] I have no hesitation in concluding that the terms of the agreement reached between the parties was intended to encompass all arrears arising under the interim order….

 

After Besharova the particular issue which arose on Oakes might attract an approach from the court based on Sirrius and on the court thinks was the parties’ joint intention.

 

Mediation, settlement terms and consent orders

 

So where does this leave mediators and lawyers whose job it may be to record an agreement and – where need be – to incorporate it into a consent order? The rules and law are the same: whether it is an agreement (eg between unmarried parties where there is limited or no scope for a court order, because no proceedings have been issued), a Tomlin order (Sirrius related to construction of the terms of a Tomlin order) and a formal consent order. The court will look behind ‘literalisms’ at what the parties intended.

 

Simplicity of drafting must be a prerequisite: the draftsperson must try to read the order as would a moderately intelligent lay-person, which will involve avoiding – or defining carefully – over-elaborate or specialised legal terms.

 

All terms agreed by the parties must be covered (which should avoid problems like those of Ms Oakes) in the order; or as an undertaking or order in Matrimonial Causes Act 1973 consent orders.

 

If there are assumptions on which the agreement/order is based – such as that which Mrs Besharova sought, unsuccessfully, to set up – must be recited in the order. Any document referred to must be recited in the agreement/order; or, better still, be attached to the order. This would include (but rarely does in most consent orders) a summary of the parties assets and of the assumptions or other Matrimonial Causes Act 1973 (or similar) factors on which the order was made.

 

Each of these terms apply equally to any mediator who drafts consent order or agreement terms, and to any lawyer who settles financial terms on relationship breakdown. And it provides a yardstick for review of an agreement/order on which a lawyer may be asked to advise later.

 

A version of this article appeared in http://www.familylaw.co.uk/news_and_comment/mediation-construction-of-terms-of-an-agreement-or-consent-order#.VwdsRaR97IU

McCARTNEY’S WAY OUT

Supplemental petitions are back

Readers may recall that Sir Paul McCartney and Heather Mill-McCartney were to be embroiled in a defended divorce on cross-allegations of unreasonable behaviour. They were rescued from a public defended divorce by the ruse of agreeing to proceed with their ancillary relief claim, to be followed – when, later, the time came – by the petitioner filing a supplemental petition based on Matrimonial Causes Act 1973 s 1(2)(b) (living apart for two years with consent). Their two years had not elapsed when their well-publicised financial proceedings were dealt with.

Probably by oversight, and careless of the boon of this procedure to Sir Paul and Mills-McCartney, the Family Procedure Rules Committee failed to include reference to supplemental petitions (they remain petitions in relation to divorce and judicial separation: MCA 1973 s 1(1)) in Family Procedure Rules 2010. And thus one of the sillier procedural passages in the life of Family Procedure Rules 2010 followed a couple of years later. In Kim v Morris [2012] EWHC Fam 1103 Parker J held that this omission of the right to file a supplemental petition was ‘a deliberate omission, and effects a substantial and important change in procedure’. She did not state her source for finding the omission to be ‘deliberate’; and she did not explain how she overcame the point that withdrawal of a right must be express, not inferred from silence.

Kim v Morris

In Kim v Morris a couple had separated in 2006. The wife obtained a decree nisi on H’s adultery (undefended; MCA 1973 s 1(2)(a)). H filed form A (application for a financial order); but the parties then resumed cohabitation in late 2006 and lived together till towards the end of 2010. W wanted to pursue her 2006 divorce. She alleged that throughout their reconciliation H had continued to commit (unadmitted) adultery. H wanted to proceed with a divorce petition in Singapore where he was now habitually resident.

If the court could rescind her decree nisi, W could file a petition supplemental to her 2006 petition. If she could not then she must start again; but H was ahead of her with his petition in Singapore. Her petition must be dismissed. Her marriage dissolution and financial proceedings would go ahead in Singapore.

I do not know whether anyone has been caught out like Mrs Morris as a result of this decision, or because of the silence of the new rules. But now, to any beleaguered petitioner who needs to prove supplemental facts, help is at hand. Family Procedure (Amendment No 4) Rules 2014 add a new FPR 2010 r 7.13 to the 2010 rules. The new rule includes:

(2) Unless [an application for a decree nisi has been made]…—
(a)a party making an application for a matrimonial or civil partnership order may amend the application at any time before an answer to it has been filed;
(b)a party making an application for a matrimonial or civil partnership order may make a supplemental application at any time before an answer has been filed;
(c)a party who has filed an answer may amend the answer.

Supplemental petition: the difference

But why does it matter: amendment, supplemental? What’s the difference? The difference is that a supplemental petition/application dates from the date of the additional petition/application, whereas the amended petition dates from the date of the original pleading.

Thus if a couple agree – say in mediation – that they will proceed on a petition under 1(2)(d) instead of on unreasonable behaviour (eg filed soon after separation, and as did Heather Mills-McCartney and Sir Paul) they would file – in the same cause – a supplemental petition. They cannot amend since the facts they are now pleading did not exist at the time of the original petition. The court fee and associated costs for this exercise would be appreciably less than for seeking leave to file, and filing, a fresh s 1(2)(d) petition.

The same would apply where a petition was proceeding under s 1(2)(b), which was the subject of an answer (defended). The respondent agree to accept an adultery petition, but will admit adultery only at a time after the s 1(2)(b) petition was filed. This and other examples will crop up. The supplemental petition may – from time to time – be a boon to the mediator. All other issues are resolved; but things said in the original petition are wanted to be unsaid.

And if agreement is reached, but a decree nisi is needed to make it enforceable: the McCartney consent order procedure has been revived by recent developments in the common law (see under MCA 1973 s 7 in Family Court Practice 2015 (yet to be published)).

MUDDLED LAW AND THE SET ASIDE JURISDICTION

Setting aside a consent order

MAP v RAP [2013] EWHC 4784 (Fam), Mostyn J (3 December 2013) http://www.bailii.org/ew/cases/EWHC/Fam/2013/4784.html shows how muddled the law can become – as between substantive law, procedure and practice guidance – if judges do not remind themselves where law shades into subsidiary legislation, and subsidiary legislation into guidance and judicial obiter dicta.

In this case the application was to set aside a matrimonial financial consent order. The law is provided for by Senior Courts Act 1981 s 17(1) (see below) as explained by Gohil v Gohil (below; decided since December 2013). FPR 2010 r 4.1(6) has nothing to do with the process; nor does any other subsidiary legislation immediately apply. As will be seen application to set aside is by appeal out of time (s 17(1)); or perhaps, as suggested by the Court of Appeal in Gohil, it may be that a separate application (perhaps under FPR 2010 Part 19) can be issued by the party seeking to set aside.

The background to the case was that, after a marriage of nearly thirty years, a wife claimed that she had consented to a financial order at a time when she lacked capacity to do so. She applied for permission to appeal to set aside the order. Mostyn J found that her appeal as to capacity was arguable and gave permission accordingly. If that appeal succeeded then the order would be set aside. Two areas were of concern to the court: the set aside procedure and capacity in the context of the case. Both points have since been considered by the Court of Appeal and Supreme Court respectively since December 2013.

However the judge made comments on aspects of the law which may be regarded as misleading, and therefore justify review here. He seems to treat Supreme Court authority as the opposite of what it said; and overlooked Court of Appeal (as explained below in relation to Re L-B and Roult).

Law, procedure and guidance

Mostyn J makes no reference to statute law; yet SCA 1981 s 17 provides for ‘applications for a new trial’ (and see commentary in Family Court Practice (the Red Book)) as follows:

17 Applications for new trial.

(1)Where any cause or matter, or any issue in any cause or matter, has been tried in the High Court, any application for a new trial thereof, or to set aside a verdict, finding or judgment therein, shall be heard and determined by the Court of Appeal except where rules of court made in pursuance of subsection (2) provide otherwise.

(2)As regards cases where the trial was by a judge alone and no error of the court at the trial is alleged, or any prescribed class of such cases, rules of court may provide that any such application as is mentioned in subsection (1) shall be heard and determined by the High Court.

This section governs set aside applications, as Ward J painstakingly explained in B-T v B-T [1990] 2 FLR 1, save where – as was the case in 1990 – Matrimonial Causes Rules 1977 made provision for county court appeals. In procedural law terminology a ‘new trial’ is to what the set aside issue is addressed: an applicant wants his/her order set aside so that a fresh trial of the issue originally resolved by the order (whether a consent order, as here; or following a contested hearing) can be arranged. And one of the disposals of an appellate court is to ‘set aside… any order’ or to ‘order a new trial or hearing’ (CPR 1998 r 52.10(2)(a) and (c)). Application to set aside and the related forms of appeal permission applications are explained in Family Court Practice (the Red Book) Part 1 at Procedural Guide E6.

Power to revoke a case management order

FPR 2010 r 4.1(6) under the heading ‘Court’s case management powers’ provides: ‘(6) A power of the court under [FPR 2010] to make an order includes a power to vary or revoke the order’.

The question of whether any jurisdiction under CPR 1998 r 3.1(7) (from which r 4.1(6) is directly derived) disposed of by the Court of Appeal in Roult v North West Strategic Health Authority [2009] EWCA Civ 444. At para [15] Hughes LJ reviewed the meaning of CPR 1998 r 3.1(7) and whether or not it could be treated as giving the court power to set aside its own order:

[15] … If [r 3.1(7) could be used to set aside a court’s own order], it would come close to permitting any party to ask any judge to review his own decision and, in effect, to hear an appeal from himself, on the basis of some subsequent event. It would certainly permit any party to ask the judge to review his own decision when it is not suggested that he made any error. It may well be that, in the context of essentially case management decisions, the grounds for invoking the rule will generally fall into one or other of the two categories of (i) erroneous information at the time of the original order or (ii) subsequent event destroying the basis on which it was made. The exigencies of case management may well call for a variation in planning from time to time in the light of developments…. But it does not follow that wherever one or other of the two assertions mentioned (erroneous information and subsequent event) can be made, then any party can return to the trial judge and ask him to re-open any decision. In particular, it does not follow, I have no doubt, where the judge’s order is a final one disposing of the case, whether in whole or in part.

Especially said Hughes LJ was this so in the case of a settlement reached with the benefit of full and skilled advice. ‘The interests of justice, and of litigants generally, require that a final order remains such unless proper grounds for appeal exist.’

Lady Hale confirmed this view in the Supreme Court in Re L-B (Reversal of Judgement) [2013] UKSC 8, [2013] 2 FLR 859 as follows:

 

[37]   Both [CPR 1998 and FPR 2010] make it clear that the court’s wide case management powers include the power to vary or revoke their previous case management orders: see CPR r 3.1(7) and r 4.1(6) of the FPR. This may be done either on application or of the court’s own motion: CPR r 3.3(1), r 4.3(1). It was the absence of any power in the judge to vary his own (or anyone else’s) orders which required the courts to led to the decisions in In re St Nazaire Company (1879) 12 ChD 88, [where the Court of Appeal decided that there was no longer any general power in a judge to review his own or any other judge’s orders]. Where there is a power to vary or revoke, there is no magic in the sealing of the order being varied or revoked. The question becomes whether or not it is proper to vary the order.

Notwithstanding that Lady Hale (though not in terms) follows Roult Mostyn J seems to derive a conclusion – ‘a challenge to findings of fact’ – which bears little relation to what she says (though he does not actually cite the passage in Re L-B to which he refers):

[17] …..Moreover, in the decision of the Supreme Court of Re L-B (A Child) [2013] UKSC 8, FPR 2010 r 4.1(6) was confirmed by Lady Hale as being the procedure by which a challenge to findings of fact would be made. And so it seems to me on that extended definition of the rule this application could quite properly be fought at first instance rather than by way of appeal.

He then goes on to cite a practice direction as ‘standing in the way’ of his perception of a Supreme Court finding (though still without reference to Roult (above) of which he was aware since it is referred to by Gloster LJ in ‘Cart v Cart’ to which he makes reference in para [18] below):

[17] … The only obstacle standing in the way of that are the terms of Practice Direction 30A para.14.1 which states:

“The rules in Part 30 and the provisions of this Practice Direction apply to appeals relating to orders made by consent in addition to orders which are not made by consent. An appeal is the only way in which a consent order can be challenged”.

And it is for this reason that the wife seeks to challenge this order which is described as being by consent by means of an appeal.

The reference to para 14.1 cannot stand in the way of the law; though in fact the final sentence of the paragraph (without citing it) accords with s 17(1).

Mostyn J then holds – to this extent he proceeds according to SCA 1981 s 17(1); though he cites the practice direction as authority for his finding – that an appeal was the correct route for Mrs MAP to follow:

[18] I am of the view that the appeal route is mandatory in respect of a consent order made by a district judge where there is no real challenge to the validity of the consent order per se. So, for example, if a challenge is being made under the famous case of Barder v Barder, then it seems to me that the Practice Direction fully applies and the appeal route is the only available route. Indeed, this is a view that has been adopted by Lady Justice Gloster recently in a decision of hers – admittedly only refusing permission in the Court of Appeal called Cart v Cart.

Appeal or a separate application

Since MAP v RAP the Court of Appeal have considered the set aside procedure in Gohil v Gohil [2014] EWCA Civ 274 (at paras [43]-[50] and [57]-[60]); but then concluded that in Gohil itself the jurisdictional issue did not directly arise since they refused Mrs Gohil’s appeal. Obiter the court suggested that an applicant may only either (1) seek to set aside on appeal (s 17(1) above; B-T v B-T [1990] 2 FLR 1); or (2) apply by fresh action (de Lasala v de Lasala [1980] AC 546; Robinson v Robinson (Disclosure) (1983) 4 FLR 102 perhaps under FPR 2010 Part 19).

In any case, said McFarlane LJ, there must be a staged process (at para [55]) in relation to non-disclosure applications:

  • ‘Gateway evaluation’: a judicial consideration of whether there is evidence to justify hearing a set aside application. The Ladd v Marshall [1954] 1 WLR 1489 guidelines (was there credible evidence which could not have been before the court below etc) would provide ‘sensible structure to evaluate any fresh material’.
  • The Livesey test: this involves assessment by the court, in the light of such admissible evidence as there is and by the ‘standard and the burden of proof applicable to a finding of fraud’ (1) whether there had been non-disclosure and, if so, whether (2) ‘it had been material to the proceedings that had been previously determined’ (see eg Sharland v Sharland [2014] EWCA Civ 95).

Capacity

In MAP v RAP the issue on which set aside would be decided was Mrs MAP’s capacity. For that she has permission to appeal – that is, in effect, permission to seek to set aside the order. The subject of capacity and its basis for setting aside an order must await another day.

The statutory position is clear: an application proceeds by appeal under SCA 1981 s 17(1) (and see Roult: a set aside application cannot go back to the judge who made the original decision). It may be that application can be made by fresh application.

Post-script: at para [18] Mostyn J refers to ‘Cart v Cart’ as follows:

[18] … the appeal route is the only available route. Indeed, this is a view that has been adopted by Lady Justice Gloster recently in a decision of hers – admittedly only refusing permission in the Court of Appeal – called Cart v Cart [2013] EWCA Civ 1006.

That was a case in which I represented the husband appellant; and as Mostyn J correctly says, Gloster LJ refused permission to appeal so the case is authority for nothing. It is true to say that Gloster LJ referred to FPR 2010 r 4.1(6) in the following terms:

[37] It cannot be said that, in relation to his ground relying upon an alleged Barder event, Mr Cart was not appealing at all, but rather asking the county court to set aside its own order pursuant to FPR 2010 r 4.1(6); and that, accordingly, all that Mr Cart was doing was seeking permission to appeal the refusal to do so by the county court. Not only does Barder itself make it clear that the correct characterisation of the process is an appeal; but also this court has made it clear in Roult v North West Strategic Health Authority [(above)] that, in circumstances where it is alleged that a subsequent unforeseen event has destroyed the assumption on which an order has originally been made, it is not appropriate for the original court to exercise its powers under CPR 3.1(7) (the CPR rule providing that a judgment or order may be set aside).

Lest it be thought that Mr Cart may have suggested that r 4.1(6) applied, I can assure anyone who is remotely interested in this relatively narrow subject: I would not have suggested it to Gloster LJ (she raised it herself). I have studied the point exhaustively over the past three years and I am well aware of what the Court of Appeal had said in Roult.