A v A

A court may release a party from an undertaking given in family proceedings where a significant change of circumstances has undermined the basis of the arrangement and continued enforcement would cause injustice. That change opens the gateway to relief but does not make release inevitable.

The court must give substantial weight to a freely negotiated clean-break agreement, the extent to which it has been implemented, and the other party’s reliance on it. Any release should be limited to what is necessary to avoid serious hardship or injustice. Where appropriate, it should be accompanied by replacement undertakings protecting the other party from excessive prejudice.

The parties entered into a detailed consent order following their divorce. It provided for a clean break, the sale of two properties, and payments by the husband to support the wife pending sale. The wife undertook to repay mortgage interest and monthly payments from her share of the sale proceeds.

After six years the properties remained unsold. The wife’s expected capital fund had substantially reduced, while the husband’s financial position had improved. HHJ Hughes QC released the wife from repaying the mortgage interest and monthly payments, subject to a revised undertaking. The husband appealed against that decision.

The appeal concerned the power to release a party from an undertaking, the significance of the parties’ agreement, and whether relief should be conditional on replacement undertakings.

1. Appeal allowed in part. The judge had been entitled to find that the prolonged failure to sell the properties constituted a significant change of circumstances. That finding opened the gateway to considering release from the undertaking, but did not itself require release.
2. The power to release a party from an undertaking was not confined to the narrow principles applicable to appeals against consent orders under [1988] AC 20 and [2009] 2 FLR 147. The court had to assess the change of circumstances alongside all other relevant factors.
3. The consent order was a carefully negotiated agreement intended to achieve a clean break and finality. It had been implemented in important respects, and the husband had made substantial payments in reliance on repayment. The first-instance judge had therefore given insufficient weight to the agreement. Any interference with it should be kept to the minimum necessary.
4. Where release from an undertaking was contemplated, the court should consider replacement undertakings and limit relief so far as possible to avoiding serious hardship or injustice. Relevant matters included the wife’s future access to pension benefits, whether funds could be released from her property, the husband’s continuing payments, and the wife’s reasonable budget and capital position.
5. The husband’s improved financial position could properly be considered in assessing fairness. That did not constitute sharing his post-separation accrual. The matter required further consideration of appropriate replacement undertakings, and the appeal was allowed to that limited extent.

• Central Family Court: HHJ Hughes QC made the order under appeal following judgments dated 22 September 2017 and 16 October 2017. The wife was released conditionally from specified repayment obligations.
• High Court (Family Division): The appeal was allowed, but only to the extent that replacement undertakings were required and the first-instance approach was adjusted.