DB v DLJ

Where parties agree to family arbitration, the court should adopt a stringent approach when asked to incorporate the award. An award should ordinarily be made an order unless a statutory correction, challenge or appeal is available, or evidence establishes a vitiating mistake or qualifying supervening event. A mere assertion that the award was wrong or unjust is insufficient.

For a Barder event, the later event must be unforeseeable, occur within a short period, be raised promptly, and cause the order’s basis or fundamental assumption to be invalidated. A mistake requires proof that material facts existed but were unknown, could not have been discovered with due diligence, and would have produced a materially different order. Relief may nevertheless be refused where alternative mainstream relief can remedy the injustice.

The husband applied for an arbitral award, made under the family arbitration scheme and supplemented by the arbitrator, to be made an order of the court. The wife resisted incorporation, alleging that the valuation of a Portuguese property was mistaken or had been invalidated by later planning events.

The parties had agreed to arbitration under the Arbitration Act 1996. The award divided their assets and provided a safety net through extendable periodical payments. The central issues were the extent of the court’s discretion when incorporating a family arbitral award, and whether the alleged mistake or later planning refusal justified refusing incorporation.

1. Application granted. The arbitral award was made an order of the court. The husband was also permitted to make the decree nisi absolute.
2. The parties’ agreement contemplated that an award requiring embodiment in a court order remained subject to the court’s discretion. The court was not a rubber stamp, but should adopt an approach of great stringency. The arbitral process must not become merely a preliminary hearing followed by a readily available rehearing.
3. Outside the correction, challenge and appeal procedures in the Arbitration Act 1996, the realistically available grounds for resisting incorporation were a vitiating mistake or a qualifying supervening event. An assertion that an award was wrong or unjust would almost never suffice. Any error would need to be blatant and extreme.
4. The Barder conditions required: a new event invalidating the basis or fundamental assumption of the order; occurrence within a relatively short time; a reasonably prompt application; and no prejudice to a third party acquiring an interest in good faith for valuable consideration. The later event also had to be unforeseeable. Whether the legal test was satisfied was a question of fact.
5. A mistake required proof that the true facts existed but were unknown when the order was made, would have led to a materially different order, were not absent through the claimant’s fault, and could not have been established with due diligence. The application had to be prompt, alternative mainstream relief unavailable, and third-party interests protected.
6. The planning refusal was foreseeable because the application was pending and refusal remained a recognised possibility. The wife had also failed to establish that she could not, with due diligence, have discovered the council’s likely approach. In any event, the award contained a safety net through the possible continuation of periodical payments, providing alternative mainstream relief if the fall in property value caused future hardship.
7. The judge stated obiter that a Barder application could be made to the original court rather than necessarily by way of appeal.