JB v DB

A financial remedy consent order may be set aside for mistake where the facts forming its basis were unknown when it was made, those facts would have produced a materially different order, and the applicant satisfies the recognised safeguards concerning fault, diligence, promptness, alternative relief and third-party interests. The requirements should not be applied so rigidly that a manifest mistake prevents a proper disposition on the true facts. Where a proposed variation of a settlement may affect children’s rights or interests, the children must have an opportunity to be represented before substantive or interim orders are made.

The parties had agreed a financial remedy consent order concerning properties in London and New York. The order proceeded on the assumption that trusts owning the properties could be collapsed, enabling their value to be brought into account and divided equally.

Expert evidence showed that the New York trust could not realistically be collapsed and that the London trust required careful variation because it affected the interests of the parties’ children. The wife sought implementation of the order, while the husband made a cross-application concerning implementation and sale. The central issues were whether the consent order should be set aside for mistake, whether the trusts could be varied, and what procedural protection was required for the children.

1. Consent order set aside. The order of 15 June 2018 was made on a fundamentally false and mistaken basis. The true facts concerning the trusts were unknown to both the parties and the court. Had they been known, a materially different order would have been made.
2. The principles summarised in J v B [2016] 1 WLR 3319, para 57, governed an application to set aside for mistake. They required consideration of whether the true facts were unknown, whether they would have produced a materially different order, whether the applicant was at fault, whether the facts could have been discovered with due diligence, whether the application was made reasonably promptly, whether alternative mainstream relief was available, and whether third parties would be prejudiced.
3. The due-diligence requirement should not be applied too rigorously where there had been a manifest mistake. The evidence before the court had assumed that the New York trust could be collapsed, and it would not have been reasonable to require the parties to investigate that assumption further at the time.
4. The London trust was subject to the court’s jurisdiction. Under s 24 of the Matrimonial Causes Act 1973, the court had power to vary it as a post-nuptial settlement. The court referred to BJ v MJ [2011] EWHC 2708 (Fam) and Mubarak v Mubarik [2009] 1 FLR 664 in recognising the practical priority of the court in whose jurisdiction trust property was situated.
5. Any application to vary the London trust had to protect the children’s interests. Under Rule 9.11 of the Family Procedure Rules, the adult children were to be joined and the younger children separately represented by a guardian. No substantive or interim order, including an order for sale of the New York property, should be made before the children had an opportunity to make representations.
6. The order was set aside with effect from 8 August 2020. The younger children were to have a guardian, and the husband was sanctioned in costs in the sum of £15,000 for his cavalier failure to engage properly in the required negotiations.

The judgment describes the earlier consent order made by the High Court on 15 June 2018 and subsequent implementation directions and applications. This judgment set aside that consent order and gave consequential directions.