US v SR

An executory financial remedy order may be revisited where a significant change of circumstances makes it inequitable to hold the parties to the original terms. The jurisdiction is cautious and confined. It is not a general power to rewrite a final order merely because implementation has been delayed. Where the original extraction route has become impracticable, the court may make contained revisions which preserve, so far as possible, the order’s underlying intention and continue to meet the parties’ needs.

This was a further hearing in long-running financial remedy proceedings following a contested distribution decision and a subsequent order made on 1 May 2015. The order contemplated the sale of a Moscow property, with the proceeds funding the parties’ housing and other capital needs. The property remained unsold, the Russian property market had materially declined, and the parties’ financial circumstances had deteriorated.

The parties sought different revisions to the order, including orders for the sale or retention of English and Russian properties. The central issue was whether the court had jurisdiction to revisit the executory order and, if so, how the revised arrangements should be structured.

1. Jurisdiction. The court had jurisdiction to revisit the 2015 mainframe order. The jurisdiction arose under the contained principle in Thwaite v Thwaite [1981] 2 FLR 280, as explained in L v L [2006] EWHC 956 and approved by the Court of Appeal in Bezelianasky v Bezelianskaya [2016] EWCA Civ 76. It also arose in the context of the procedure under FPR 2010.
2. The power was not general or unfettered. The court had to identify a significant change of circumstances and determine whether it would be inequitable to hold the parties to the original terms. The case was materially different from mere delay in implementing a routine property adjustment order, which could not alone justify setting aside the order under rule 9.9A.
3. The original order had become impracticable in its intended operation. The Moscow property remained unsold for more than four years, its value had substantially fallen, and the parties required liquidity for housing. The court could therefore conduct the effective rehearing contemplated by FPR 2010 rule 9.9A(5), despite the absence of a formally constituted application under that rule.
4. Any revision had to be contained and should reflect, so far as possible, the original extraction route and distributional intention. Needs remained central under section 25 of the Matrimonial Causes Act 1973. The court treated the husband’s pension and the wife’s retained Moscow property as broadly balancing one another for present purposes, ordered the sale of the English property and the remaining Russian investment property, and apportioned the English sale proceeds 70% to the husband and 30% to the wife.
5. The wife retained the Moscow property earmarked for future income. The husband’s outstanding costs liability was to be paid from his share of the English sale proceeds, and his contribution towards the children’s expenses was to be set off against his interest in the other Russian property. A contingent lump sum was ordered in respect of 50% of any interest liability ultimately imposed on the wife in separate costs proceedings. There was otherwise a clean break and no order as to the costs of the hearing.

The judgment describes earlier contested financial remedy proceedings and a subsequent application for permission to appeal. The Court of Appeal refused the wife’s application for permission to appeal on 16 January 2017. This judgment was a further first-instance hearing before the original judge to determine the outstanding applications and revise the implementation of the 2015 order.