Critchell v Critchell

The Barder principle may justify reopening a financial order where a new event, occurring shortly after the order, invalidates the fundamental assumption on which it was made. The relevant change need not be an increase in the value of matrimonial assets. It may instead be a fundamental change in the parties’ needs arising from a change in available resources. Where a deferred sale or charge was necessary to meet both parties’ needs because resources were limited, an unforeseen inheritance may remove one party’s need for that arrangement and satisfy the first Barder condition. The remedy remains exceptional, having regard to the public interest in finality in litigation.

The parties were separated spouses with two children. Their only substantial matrimonial asset was the former matrimonial home. By consent, the home was transferred to the wife subject to a mortgage, with a 45 per cent charge in favour of the husband payable on specified future trigger events. The arrangement reflected the parties’ limited resources and their respective housing and debt needs.

Within a month, the husband’s father died unexpectedly. The husband inherited about £180,000 and his liability to repay an £85,000 advance from his father was extinguished. The wife’s appeal under the Barder principle succeeded before Her Honour Judge Wright, who extinguished the husband’s charge. The husband appealed to the Court of Appeal. The central issue was whether the inheritance invalidated the basis or fundamental assumption underlying the consent order.

1. Appeal dismissed. The Court of Appeal upheld the order extinguishing the husband’s charge over the former matrimonial home.
2. Black LJ accepted the four conditions stated by Lord Brandon in Barder v Barder (Caluori intervening): a new event must invalidate the basis or fundamental assumption of the order; occur within a relatively short time; be followed by a reasonably prompt application; and not prejudice good-faith third-party purchasers for value. Only the first condition was disputed.
3. The original consent order was dictated by need. Need is relative to the resources available. Where resources are limited, a Mesher arrangement may be necessary to meet both parties’ needs, despite the future burden placed on the wife and the husband’s inability to access capital immediately.
4. The inheritance did not materially alter the value of the matrimonial assets. It fundamentally altered the husband’s needs and resources. His debt to his father had disappeared and his mortgage could be discharged from the inheritance, so he no longer needed his interest in the former matrimonial home to meet those liabilities. That change invalidated the order’s fundamental assumption.
5. The substituted order was permissible and unexceptionable. The court emphasised that the decision was an application of established principles to the stark facts and was not intended to change the restrictive jurisprudence. Finality in litigation remains an important countervailing principle, and successful Barder applications are rare.

• Court of Appeal (Civil Division) dismissed the husband’s appeal and upheld the order made by Her Honour Judge Wright.
• High Court of Justice, Principal Registry of the Family Division (Her Honour Judge Wright) allowed the wife’s appeal against the consent order and extinguished the husband’s charge over the former matrimonial home.
• District Judge Mullis made the original consent order at the financial dispute resolution hearing on 12 March 2013.