Amey v Amey
| Jurisdiction | England & Wales |
| Judgment Date | 07 November 1991 |
| Court | Family Division |
SCOTT BAKER, J
Agreement – financial provision – made between spouses after divorce – wife dying shortly after agreement made – whether agreement should be set aside on ground of mutual mistake or frustration.
Financial provision – agreement between spouses after divorce – wife dying before proposed consent order made – whether agreement should be set aside on ground of mutual mistake or frustration.
The plaintiff husband married the wife in 1971. The wife had two children of a former marriage who were now adults. In 1972 the husband bought an inn for £12,000. It was a run down public house but over the years the husband and wife improved it so that the business they ran in partnership prospered. The husband and the wife were divorced in 1986. Negotiations as to financial provision followed and it was agreed that the husband should pay to the wife £120,000. Broadly, the effect of the agreement was to split the assets 50/50. In pursuance of the agreement, on 1 October 1986 the husband paid £120,000 to the wife. On 9 October 1986 counsel for the wife settled draft minutes of order with the intention that it should be put before the court and a consent order approved, but this was not done. On 8 December 1986 the wife bought the lease of another inn using part of the £120,000 for the purpose. The husband knew the money would be used for this purpose. On 9 December 1986 the wife, who was aged 43, died suddenly and unexpectedly. The wife's two children were the beneficiaries under her will. The husband, who was aged 66, sought the rescission of the agreement and the return of the £120,000. The wife's children were the defendants to the proceedings.
Held – dismissing the application: After divorce, the parties could regulate their financial affairs either by agreement which was reviewable by the court, or by a court order which, where a "clean break" provision was made, was not reviewable by the court. Where an agreement was approved by the court and embodied in an order, the legal effect of the provisions was derived from the court order: de Lasala v de Lasala [1980] AC 546 and Jenkins v Livesey [1985] AC 424. There was no jurisdiction to hear an application for ancillary relief after the death of one of the parties: D'Este v D'Este [1973] Fam 55. Where parties reached an agreement, the fact that it was declared to be subject to the approval of the court did not prevent a binding agreement being made pending the court's approval: Smallman v Smallman [1972] Fam 25. A court order could be set aside on appeal where, inter alia, new events occurred which totally invalidated the basis, or fundamental assumption, upon which the order had been made: Barder v Calouri [1988] AC 20. In the present case, no order had been made and the agreement would stand or fall at common law. Where a contract was based on a fundamental assumption
which was not true, such a mutual mistake at the time the contract was entered into would cause the contract to be void. Where an unexpected event changed the face of things, so that the thing undertaken would be different from that contracted for, the contract would be frustrated. But a mistaken expectation of one of the parties would not render the contract void as hardship or inconvenience or material loss itself would not call the principle of frustration into play. See Amalgamated Investment and Property Co Ltd v John Walker & Sons Ltd [1977] 1 WLR 164. The test was essentially the same as in Barder. In that case, the fundamental assumption was that the wife and children required a home for a substantial period. This was invalidated when the wife killed the children and committed suicide shortly after the order was made. In Re Smith (Deceased); Smith v Smith [1991] FCR 791 the wife was awarded a lump sum and committed suicide five months after the order was made. The main issue in that case was where and how to house the wife. It was not in dispute that the wife's death invalidated the basis upon which the order was made and the issue was how the court should approach a reconsideration of the order. In the present case, finding enough money to rehouse the wife was not central to the agreement. The parties were negotiating a commercial settlement of matrimonial proceedings. They were dividing up the capital in the light of the contribution each had made both financially and otherwise to the business. It was not a fundamental assumption that underpinned the agreement that the wife was in good health and that she would live for a period of months or years. If the parties had known what was going to happen, they might well have struck a different bargain but that was not the same as saying that the wife's continued survival was the basis of the agreement. Therefore, the husband's claim for rescission of the agreement failed.
Paul Coleridge for the plaintiff (husband).
David A Pearl for the defendants (children).
MR JUSTICE SCOTT BAKER.This case raises a point on which there is no direct authority. A husband, who is the plaintiff, concluded a financial agreement with his wife on the termination of their marriage. This was achieved with the assistance of solicitors on both sides. In short, it involved payment by the husband of £120,000 to the wife in full and final settlement of all claims. He paid the £120,000 in pursuance of the agreement, but before the agreement was put before the court for approval, the wife unexpectedly died. The husband seeks rescission of the agreement, ie he wants the money back.
The defendants are the wife's grown up children by her former marriage, the beneficiaries under her will; they are also her executors.
The material facts can be quite shortly stated and are not in dispute. I have been asked to decide...
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