The wife sought permission out of
time to appeal a consent order. The wife had entered into a consent order which
provided the husband with 80% of the capital, and the wife with 20%. The
primary basis of appeal was that the wife did not have mental capacity to enter
into the compromise agreement due to her having bipolar effective disorder.
The parties married in 1981 and
had separated by 2010. The wife had bipolar effective disorder and had been
detained under the Mental Health Act 1983 a number of times. An agreement was
reached in August 2011 in correspondence to settle her financial claims against
her husband, which gave the husband 80% of the capital and the wife 20%.
Shortly after, the wife was detained by police under section 2 of the Mental
Health Act, and she was then sectioned under section 3. The wife was released
from hospital on 1 October 2011 and she disinstructed her solicitors shortly
A consent order was submitted to
the court in April 2012. Neither party's solicitor notified the court that there
was an issue about the wife's mental capacity. Before the order was approved by
a judge, the wife wrote to the court explaining that she suffered from mental
illness and that she believed she had signed the agreement under duress.
However, the district judge was unaware of the letter when the draft consent
order came before her, and it was sealed on 19 April 2012.
The wife subsequently appealed
the consent order.
Grounds of Appeal
The wife advanced seven grounds
of appeal, which were as follows:
the wife lacked capacity to enter into the compromise;
the court had no knowledge of this lack of capacity;
the husband had exploited the wife’s vulnerable state;
the husband was guilty of material non-disclosure;
the wife had inadequate knowledge and was without legal
the compromise was manifestly unfair to the wife; and
the agreement provided for a clean break, when it was
inappropriate to do so.
Mostyn J dismissed the grounds
relating to non-disclosure and unfairness from the start, and focused on the
wife’s capacity to enter into the compromise agreement.
Mostyn J stated that
surprisingly, lack of capacity did not appear to have been used before as a
ground for setting aside a consent order. As such, Mostyn J had to look to
civil law in order to consider the law relating to capacity and compromise.
Rule 21.10 of
the Civil Procedure Rules states that a compromise of proceedings by or against
a protected party shall not be valid by or against the protected party unless
it is approved by the court, and that the protected party should be represented
by a litigation friend.
Family Procedure Rules 2010 do not have an equivalent provision. However,
Mostyn J held that he was
that if one party to a compromise lacks capacity then that will act to
invalidate any consent order, even if neither the other party nor the court is
aware of it'
He reached this conclusion based on the decision of Bean J in
Dunhill v Burgin  EWHC 3163 (QB),  COPLR 56who
came to the same conclusion in a personal injuries case. It should be noted
that Bean J’s decision was overturned by the Court of Appeal, but permission
has been granted to appeal to the Supreme Court
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Mostyn J also looked at Bailey v Warren  EWCA Civ 51, where Lady Justice Arden stated that for a party to have capacity to approve a compromise to proceedings he needs insight into the compromise, an ability to instruct his solicitors to advise him on it, an understanding of their advice and an ability to weigh their advice.
Mostyn J held that the wife had an arguable case that she did not have capacity to enter into the consent order.
However, rather than granting permission to appeal, Mostyn J directed that the issue be heard at first instance as a set-aside application, no as an appeal.
In coming to this conclusion, Mostyn J considered FPR 2010, r 30 and PD30A, which set out that where an order is made by consent, the only way to challenge the order is by appeal.
However, Mostyn J held here that with lack of capacity the validity of the consent order is being questioned, and so the application should be made at first instance to a district judge to revoke the order, using the procedure under FPR 2010, r 4.1(6). This is unlike the procedure with a Barder application, for example, which is made by an appeal. In order to come to this conclusion, Mostyn J relied on Re L-B (Reversal of Judgment)  UKSC 8,  2 FLR 859 where Lady Hale stated that FPR 2010, r 4.1(6) governs the procedure for challenging findings of fact and found that the rule also applies to setting aside a consent order where there is no true consent.
This case seems to be the first case to decide that lack of capacity constitutes a ground to set aside a consent order, even if neither party nor the court is aware of this. This is a sensible and common sense finding, and it is surprising that no case has previously ruled on this. It also sets out that the correct procedure to use in these circumstances is to apply for the court to vary or revoke the consent order under FPR 2010, r 4.1(6), rather than to appeal the consent order under PD30A. As such, the case is significant.
It is also important for practitioners to remember that PD15B para 1.3 places a duty on solicitors to inform the court if they have concerns about a party’s capacity. If both parties had complied with this duty it is likely that the consent order would never had been made. The views expressed by contributing authors are not necessarily those of Family Law or Jordan Publishing and should not be considered as legal advice.