When finality is not always the last word

It can be extremely difficult for someone to appeal against a consent order or challenge its continuance. A consent order is made by the court with the agreement of the divorcing couple and contains the terms of the financial settlement that the couple have agreed to enter into. This is particularly the case where those involved have provided full financial disclosure and have been represented by lawyers.

In a recent case the former wife of the deceased appealed against an order made by consent in November 2014. The couple had married in 1997 and separated in 2014. The wife was judged to be “fabulously wealthy” having net assets of £27.2million in her own name and net assets held in trust with a value of £242million. The former husband’s personal net assets were just over £2million.

Prior to the marriage, the couple had entered into a pre-nuptial agreement but little attention was later given to it by the time they entered into their consent order.

During the marriage, an estate was bought as the family home. It had been in a dilapidated state but was restored to make a “magnificent home and park” worth approximately £30million. The husband’s mother lived in a property on the estate. The consent order provided for the wife to make a payment to the husband of £17.3million. Payment was to be made in two equal tranches, the first within 14 days of the consent order and the second within 14 days of the husband’s mother leaving the estate property which she did in late January 2015. However, the husband committed suicide 22 days after the consent order was made. His Will left his estate to his three adult brothers but nothing to his children. In a side letter to his brothers, the husband had made it clear that they were not to return any money to the wife as he viewed the settlement as “a reward for the pain of recent months”.

The wife appealed the consent order on the basis that “the fundamental assumptions on which the order was made was that the husband required the money to meet his own needs which had been totally invalidated by his death”. The wife wanted the consent order set aside and repayment of the majority of the first tranche that she had paid, the balance of £1.5million to be returned to her once the husband’s mother no longer had the need of a property which had been bought for her so that she could move out of the estate property.

The judge concluded that

• the husband’s death had only been a “theoretical possibility” as neither foreseen nor foreseeable. Whilst there had been concerns over his mental health, the reports had become “uniformly positive” by September 2014
• the settlement had been entered into based largely on the husband’s needs and not due to sharing and was, therefore, “susceptible to being set aside” as the husband’s needs claim had prevailed over his sharing claim
• the award of £17.3million should be reduced to £5million which although worked out on a sharing basis was not significantly greater than had the award been on a needs basis given that approximately £3million was needed to cover the housing costs of the husband’s mother the parties having taken on that responsibility. Equally it would not have been unreasonable for the husband to have had the capability of making “modest bequests”
• the payment of £17.3million was reduced to £5million with the requirement to pay the second tranche being set aside and the husband’s estate being required to repay £3.7million to the wife.

Whilst this is an extreme case, it still demonstrates that even where a settlement has been entered into by consent it is possible for the courts to vary or set aside that settlement where there has been a significant and unforeseen event which has the effect of making the award unfair or unreasonable.