Facts
- A final order was made by consent in 2012 (‘the Final Order’). The Final Order included property adjustment orders in respect of three properties.
- The Final Order was not implemented in accordance with its terms due to disputes about the sale process and the selling agents, among other things. This led to implementation litigation.
- In June 2016, the wife (‘W’) appealed an implementation order. She was granted permission to appeal that order (it was unclear whether she also obtained permission to appeal the Final Order out of time).
- Prior to the hearing of W’s appeal, the husband (‘H’) was declared bankrupt. The judge hearing W’s appeal (‘the appeal judge’) discharged the Final Order and replaced it with a new order (‘the New Order’). The appeal judge explained in his judgment that he was entitled to discharge the Final Order and replace it with the New Order because the Final Order remained executory and was ‘at the very edge, if not already beyond, any effective period of implementation’.
- The New Order had a significantly different economic impact on the parties compared to the Final Order. The effect of the New Order was to transfer c. £46,000 from H to W. H appealed the New Order.
Held, granting the appeal
- Parliament was very careful to keep the powers of variation and discharge under section 31 Matrimonial Causes Act 1973 tightly confined. It is an iron rule that aside from a lump sum payable by instalments, and aside from a set aside on traditional grounds, a capital award cannot be varied or discharged by a court of first instance.
- A “liberty to apply” clause does not entitle a court to rewrite non-variable capital awards and to make different ones. Equally, the fact that a dismissal clause does not take effect until there has been full compliance with certain transfers and payments plainly does not entitle a court to replace an executory order with a new one.
- The decision of Thwaite v. Thwaite [1982] Fam 1 did not entitle the judge to make the New Order. In that case, Ormrod LJ stated “Where the order is still executory (…) and one of the parties applies to the court to enforce the order, the court may refuse, if in the circumstances prevailing at the time of the application, it would be inequitable to do so.” This gave no support to the notion that if the court refuses to enforce an order it gains the power to make a completely new one.
- It would not have been appropriate to decline to enforce the Final Order pursuant to Thwaite and to ask W to provide an undertaking that she would transfer c. 46,000 to H in a form of barter as was envisaged by Lord Wilson in Birch v. Birch [2017] UKSC 53. This would have been a blatant circumvention of the statutory prohibition on variation.
- Mere delay in implementation of the Final order provided no ground for setting aside the Final order on grounds of fraud, mistake or supervening event under rule 9.9A FPR.
- Moreover, the New Order should be set aside because at the time they were made, H was bankrupt and all of his property was vested in his trustee in bankruptcy, so that he did not in fact have £46,500 worth of property capable of being taken from him and given to W.
