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Family Law

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12 MAR 2009

ANCILLARY RELIEF: Horne v Horne [2009] EWCA Civ 487

(Court of Appeal; Thorpe and Sullivan LJJ; 12 March 2009)

In the parties' ancillary relief proceedings, the final order had aimed at achieving equality between the husband and wife. The joint submission of parties was that the family business was to be treated as a liquid asset, even though it had not traded profitably for some years. The judge noted that he was not really being given the opportunity to divide like with like, but, on the basis that the business was to be valued on its assets only, and not on profit, was prepared to treat the business as a liquid asset. Under the order the husband was to retain the family business, while the wife was to have the matrimonial home plus a lump sum of £180,000 by instalments. The general economic decline led to further problems for the business. The wife applied to enforce the order, and the husband sought to vary his obligation to pay mortgage interest pending sale. Later, acting as a litigant in person, the husband sought leave to appeal the original order on the principles set out in Barder v Caluori [1988] AC 20. Although the husband failed to file any evidence in the appeal, the county court judge ordered that the notice of appeal be listed for oral hearing, without requiring the husband to file a skeleton argument, or giving him any opportunity to file evidence. The judge did direct the wife to prepare a skeleton argument, disregarding the fact that the wife had no skeleton argument to which to respond. At the short oral hearing the judge admitted various documents that the husband had brought with him to court, including a fresh report from accountants. The judge allowed the husband's appeal, concluding that there had been such a change in financial circumstances as to amount to a Barder event. The wife appealed.

The judge had been led to an unsupportable conclusion, partly as a result of the disregard of procedural convention. The case had not been ready for a final hearing; at the most, the judge should have given directions, perceiving that the case was in a procedural mess. The procedure adopted by the county court had been casual in the extreme, had plainly ignored rules to govern case management, and, further, seemed to have ignored principles of natural justice. In addition, the judge had wrongly applied established authority. Although there had been a sharp fall in property valuations, and continued trading losses for the business, these had been perfectly foreseeable, or at least within the range of the foreseeable, at the time of the original order. As set out in Cornick v Cornick [1994] 2 FLR 530, an asset whose value had changed within a relatively short time as a result of natural price fluctuation did not fall within Barder principles. The decision in Heard v Heard, 20 June 1994, that a dramatic reduction in the value of the matrimonial home had been a Barder event did not fit comfortably with the other authorities and was wrong. Although it was a Court of Appeal decision, Heard had been decided without assistance from a family specialist judge, and without knowledge of Cornick. The true path to be followed by trial judges was the path set by Barder and Cornick. The wife's appeal was allowed. However, the court noted that the husband should originally have applied for variation of the lump sum order, rather than attempting to appeal it, and could still do so as, although the obligation to pay the money had matured, no money had yet been paid. The statutory power to vary a lump sum order by instalments was not directly governed by Barder, although, as noted in Westbury v Sampson [2002] 1 FLR 166, the court exercising this jurisdiction should be almost as stringent as when determining a Barder appeal.

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