Shaw v Shaw

Final financial remedy orders may be reopened only in exceptional cases. An applicant must identify either a fundamental defect in the original process or an unforeseen supervening event, and must act with reasonable promptitude. This requirement applies regardless of the procedural route chosen.

A later continuation or strengthening of a relationship whose nature and possible future development were examined at the original hearing is not material non-disclosure and does not justify reopening the order. The instalment structure of a lump sum does not permit a general review of its quantum under Matrimonial Causes Act 1973. Periodical payments remain variable in the court’s discretion.

Following divorce, the district judge made a clean-break financial remedy order for the wife. It included a lump sum of £400,000 and short-term periodical payments. The husband appealed, but the parties compromised that appeal by consent. The lump sum was reduced to £300,000, of which £125,000 had already been paid.

After the husband defaulted, the wife took enforcement action. The husband later sought to reopen the consent order, alleging that the wife had failed to disclose the long-term nature of her relationship with another man. He also relied on the financial consequences of the enforcement process. His Honour Judge Hall accepted those contentions, reduced the unpaid lump sum from £175,000 to £70,000, reduced the periodical payments, and altered costs orders.

The wife appealed. The central issues were whether the consent order could be reopened after substantial delay, whether there had been material non-disclosure, and whether the continuing periodical payments should be varied.

1. Appeal allowed. Thorpe LJ held, with Kay LJ and Ferris J agreeing except on the extent of variation of periodical payments, that Judge Hall should not have reopened the consent order. The unpaid lump sum was restored to £175,000. The wife was not required to bear any part of the sheriff’s costs. There was no order as to the costs of the trial before Judge Hall.

2. Thorpe LJ held that finality has particular importance in financial remedy litigation. Reopening under Livesey v Jenkins concerns a fundamental flaw in the original process, whereas reopening under Barder v Caluori concerns an unforeseen supervening event. Whatever procedure is used, the applicant must act reasonably promptly. A substantial and unjustified delay should ordinarily prevent a costly further investigation.

3. The wife had not materially failed to disclose her relationship. Its nature and extent had been investigated at the original hearing. The district judge had to take account, under Matrimonial Causes Act 1973, of foreseeable future developments, including the possibility that the relationship might strengthen or end. Its later continuation therefore did not permit the husband to reopen an entitlement earned through the marriage and the wife’s contributions.

4. The fact that the lump sum was payable by instalments did not widen the husband’s ability to reopen its quantum under section 31. Similar finality considerations applied. The wife had also acted reasonably in enforcing an overdue order after prior defaults; the alleged causal connection between her enforcement steps and the husband’s financial difficulties did not justify criticism of her.

5. By a majority, Thorpe and Kay LJJ varied the periodical payments to a nominal sum from 6 April 2000. Although the husband had agreed both interest and periodical payments during default, the court’s family jurisdiction allowed a discretionary adjustment. The children’s interests, the husband’s deteriorated finances, and the wife’s continuing financial support made double compensation inappropriate. Ferris J dissented on that issue, considering that the husband should remain bound by that bargain.

• Court of Appeal (Civil Division): Allowed the wife’s appeal and substantially restored the consent financial remedy order.
• Leicester County Court (His Honour Judge Hall): Reopened the consent order, reduced the unpaid lump sum and periodical payments, and made adverse costs orders against the wife.
• Lincoln County Court (District Judge Robinson): Made the original clean-break financial remedy order. The husband’s subsequent appeal was compromised by a consent order reducing the lump sum.