Kicinski v Pardi

When varying an executory financial remedies order under the Thwaite jurisdiction, the court must ask two questions: whether there has been a significant and relevant change of circumstances since the order, and whether it would be inequitable to leave the order unchanged. The change need not have been wholly unforeseen. A Rose order is final and binding although parts remain to be perfected or implemented. Where a clean-break settlement was agreed on the basis that related claims would be released, subsequent failure to provide that protection may justify variation. The court may impose an indemnity where the changed circumstances make it inequitable to leave one party exposed to a contingent liability, taking account of the practical and financial relationship between the persons involved.

The Wife appealed a decision of Recorder Allen QC dated 16 July 2020 in financial remedies proceedings. Permission to appeal had been granted, and the appeal concerned whether the court should vary a Rose order or grant a stay pending transfer of substantial funds held in Swiss accounts.

The original order followed an agreement involving the Wife, the Husband and the Husband’s uncle and aunt. It contemplated that related Italian proceedings would be withdrawn and that deeds would protect the Wife and her solicitors from further claims. The deeds were not completed, and the Italian proceedings continued until dismissal. The central issues were whether these events constituted a significant change of circumstances and whether it would be inequitable to hold the Wife to the original order.

1. Appeal allowed. The judge below had been wrong to conclude that the Thwaite jurisdiction was not engaged. The order remained executory because operative provisions, including transfer of the Swiss funds, had not been implemented.

2. The jurisdiction involves two requirements: first, a significant and necessarily relevant change of circumstances since the order was made; secondly, whether, in light of that change, it would be inequitable not to vary the order. The court should approach the jurisdiction with care, but there is no separate requirement that the change be wholly unforeseen. The formulation in Bezeliansky v Bezelianskaya [2016] EWCA Civ 76 supplies the applicable approach.

3. The Wife had agreed to a clean-break settlement on the reasonable understanding that the related claims would be withdrawn and that the agreed deeds would protect her and her solicitors. The failure to secure that protection placed her in a materially different position from that contemplated by the agreement. The matters left open concerned implementation rather than the substantive bargain.

4. It was inequitable to leave the Wife exposed to a contingent liability which she could not recover under the clean-break settlement. The court could take account of the close financial relationship between the Husband and the uncle and aunt, although it could not determine precisely how independently they acted. The indemnity sought from the Husband to the Wife was not a materially new claim; it removed the parts of the earlier formulation relating to direct protection of the solicitors.

5. The court rejected the suggestion that the Wife’s only remedy was to treat the entire agreement as void and begin the financial litigation again. The purposes of the jurisdiction include preventing a party from exploiting incomplete implementation of an agreement or executory order to reignite litigation.

6. The costs order below was set aside. Any further costs submissions were to be dealt with in writing.

• High Court (Family Division): appeal from the decision of Recorder Allen QC dated 16 July 2020 allowed. Permission to appeal had been granted by Cohen J on 26 August 2020.