Appeals Against Final Matrimonial Orders

What happens when an asset awarded to one of the parties in a divorce settlement

suddenly and unexpectedly loses its value? In these turbulent financial times this can happen and the result may well be that the order will no longer makes proper financial provision for one of the spouses. The question will then arise as to whether a significant change in the value of an asset after the final order was made will be sufficient for a court to allow an appeal against the original order out of time.

The leading case on this is Barder v Calouri [1988]. Such appeals are therefore known by the shorthand of Barder appeals. The case sets out the test and conditions which must be satisfied before the court will exercise its discretion to allow an appeal out of time against a final order.

The following must be shown:

the basis upon which the order was made has been invalidated by new events;

these new events have occurred within a short time of the order being made and probably not more than a few months;

there has been no delay by the applicant in applying to the court;

any third party will not be prejudiced if an appeal is allowed.

Even where there has been a dramatic change in the value of an asset after it was awarded to one of the parties, the courts have made clear that an appeal will not be allowed if:

the asset had been wrongly valued at the hearing;

the change in value had occurred through natural market forces that had been correctly valued at the hearing.

An appeal will only be considered therefore where something unforeseen and unforeseeable had occurred which resulted in a substantial change in the value. An example might possibly be the shares in BP which dramatically nosedived after the Gulf of Mexico oil leak. However where a party has speculated on an asset, the court will not relieve that person of the risk of the speculation if things go wrong. When a party has speculated and taken the risk of an asset increasing in value, he cannot complain should the investment lose value.

Fluctuation through natural market forces in property prices or the value of an investment, however dramatic, are not grounds for upsetting a final order in matrimonial proceedings. There are few instances where an appeal has been allowed against a final financial order.

The case of Horne is an example of this reluctance. Here a husbands business had collapsed as a result of the recession and he was unable to pay the lump sum ordered. It was considered that the Barder test had not been satisfied as the collapse of the business was only brought about by natural financial forces.

The case of Walkeden is another recent and interesting example. Here a husband who had been awarded shares in the settlement had sold them for far more than had been anticipated. The wife's appeal was refused on the basis that the highly speculative value of shares was reflected in the settlement.

That there has to be finality to litigation has always been a principle of the courts. It is not in the public interest and against the principle of finality in litigation for an appeal to be allowed on the basis of a change in the value of assets. It is not likely to be allowed.

Andrew John

by: Andrew John

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