Thompson v Thompson

JurisdictionEngland & Wales
JudgeLORD JUSTICE MUSTILL
Judgment Date23 July 1991
Judgment citation (vLex)[1991] EWCA Civ J0723-5
Docket Number91/0770
CourtCourt of Appeal (Civil Division)
Date23 July 1991

[1991] EWCA Civ J0723-5

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL(CIVIL DIVISION)

ON APPEAL FROM THE HARROGATE COUNTY COURT

(HIS HONOUR JUDGE HUNT)

Royal Courts of Justice

Before:

Lord Justice Mustill

and

Mr Justice Waite

91/0770

Jean Elizabeth Thompson
and
Michael John Thompson

MR JEFFREY LEWIS, instructed by Messrs Lupton Fawcett (Leeds), appeared for the Appellant (Petitioner).

MISS JANET HAYWOOD, instructed by Messrs Wilfred Anderson (Harrogate, North Yorkshire), appeared for the Respondent (Respondent).

LORD JUSTICE MUSTILL
1

The following is the judgment of the court.

2

This case is about the effect of a change in circumstances after the making of a "clean break" order for financial provision in matrimonial proceedings.

3

The parties to the proceedings, whom we will call "the husband" and "the wife" although they are no longer such, were Michael and Jean Thompson. Their marriage lasted for 17 years and broke down during 1986. A decree absolute was pronounced in January 1990. The two children, who are now aged 16 and 14 years, live with their mother.

4

When the contested hearing took place before District Judge Grills on 1st June 1990 the following figures formed the basis of his ruling. First, as to assets. The matrimonial home was valued at £75,000 subject to a mortgage of £5,600 (we shall round figures to the nearest £100). The husband had life policies worth £8,500 and the equity of another house, amounting to £9,800. Finally there was the husband's apparently failing business as travel agent, taken into account by the judge at £20,000.

5

On the debit side was an indebtedness of £27,600 to the bank, a personal liability of the husband but secured by second mortgage on the matrimonial home. The husband had further debts of £6,000, and each party had liabilities for costs, quantified on the wife's side at £6,500. Finally in order to bring the matrimonial home up to its full realisable value there would have to be repairs costing £3,000.

6

On these figures the district judge first made a calculation of the amount which the wife would have received on the basis of one-half of the value of the matrimonial home (net of the first mortgage) plus one-third of the value of the Leeds house, the policies and the business. Plainly, however, the district judge was concerned to ensure that the wife had somewhere to live with the children. He therefore achieved roughly the same financial result by ordering that the wife should have the matrimonial home, together with the burden of the repairs, the first mortgage and her legal costs, and should pay the sum of £7,500 to the husband.

7

The outcome of this order was that of the available assets the wife's share was £52,500 and that of the husband, after taking account of his legal costs, was about £6,500. Bearing in mind that the husband was left with nowhere of is own to live, this was a stern order from the husband's point of view, since he had to satisfy from the speculative sale value of his business and the £7,500 from the wife not only his indebtedness to the bank but also his own costs. Nevertheless, as the district judge said, "It is the best that can be achieved in the circumstances". Significantly, the district judge explained:

"The effect of the order will be that the Respondent is able to discharge his immediate debts from realising his policies, he will have from the sale of the lease and from the payment by the Petitioner sufficient to discharge his overdraft to the Royal Bank of Scotland, and he will be able to take the benefit of any increase in the value of the lease about £20,000.00 towards his costs. It is up to him to market the lease to his best advantage".

8

The time for appealing from the district judge to the circuit judge is very short—only five working days—even in cases of critical financial importance to the parties. This time expired on 8th June 1990. Since the order was favourable to the wife she did not appeal. Only one week later there happened an unexpected turn of events. The husband sold his business for £45,000. When this came to the knowledge of the wife she promptly applied for leave to appeal out of time. The application was heard on 21st September 1990 by His Honour Judge Hunt, who dismissed it. By leave of Lord Justice Balcombe the wife now appeals to this court against that decision of the circuit judge.

9

In order to set that decision in context we must rehearse the three reported cases to which the circuit judge was referred. Of these much the most important is Barder v. Barder (Caluori) [1988] 1 A.C. 20. There the registrar had made a consent order which included, amongst other provisions, the transfer of the matrimonial home to the wife, who was to live there with the two children. Only five weeks later the wife killed herself and the children. The husband applied for leave to appeal out of time on the ground that this tragic event had fundamentally and unforeseeably altered the basis on which the order had been made, and that if the order was undisturbed the result would be a benefit to the deceased's mother who was not a member of the family unit for whose interests the legislation was intended to provide. In the House of Lords the order of the circuit judge granting leave to appeal was upheld. The leading speech was delivered by Lord Brandon of Oakwood, and we must quote from it at some length, omitting the discussion of an issue which does not arise here. His Lordship first dealt with the merits:

"There can, in my opinion, be no doubt that the consent order dated 20 February 1985 was agreed between the husband and the wife through their respective solicitors, and approved by the registrar, upon a fundamental, though tacit, assumption. The assumption was that for an indefinite period, to be measured in years rather than months or weeks, the wife and the two children of the family would require a suitable home in which to reside. That assumption was totally invalidated by the deaths of the children and the wife within five weeks of the order being made.

The merits of an appeal by the husband against the order fall necessarily to be considered on the hypothesis that leave to appeal out of time has rightly been given, for without such leave no appeal could be brought. On the hearing of the appeal the judge would be bound to take the factual situation as it then existed, and not as it was when the order appealed from was made: in other words he would be bound to recognise that the fundamental assumption on which the order had been agreed and made had in the meantime become totally invalidated. The circumstance that the order was a consent order would, moreover, be of little significance in a matrimonial proceeding of this kind. This is because the property and financial arrangements agreed between the parties in such a proceeding derive their effect from the order itself, and not from the agreement: de Lasala v. de Lasala [1980] A.C. 546; Thwaite v. Thwaite [1982] Fam. 1; Jenkins v. Livesey (formerly Jenkins) [1985] A.C. 424.

On behalf of the intervener it was strenuously contended that where, as in the present case, an order relating to financial provision and property transfer was made on a clean break basis, the parties took their chances with regard to the occurrence of any future events that might invalidate any assumption on which the order was made. The whole object of such an order was to achieve finality and that object would be defeated if an appeal were to be allowed because of the occurrence of such events. In support of this contention reference was made to Minton v. Minton [1979] A.C. 593 and to the observations of Lord Scarman in Jenkins v. Livesey (formerly Jenkins) [1985] A.C. 424, 430. I recognise the importance, in general, of according to clean break orders the finality which they are intended to achieve. But if, by reason of supervening events occurring within a relatively short time, the fundamental assumption on the basis of which such an order was made has become totally invalidated, I cannot see why the circumstance that a clean break was intended should make any difference. The intention to produce a clean break on the terms of the order will itself have been founded on the subsequently invalidated assumption.

Having regard to the matters which I have discussed above I am clearly of the opinion that, on the hypothesis that leave to appeal out of time has rightly been given, the merits of the appeal are all one way: the appeal should be allowed and the order of Judge Smithies restored."

10

His Lordship then turned to the question of leave to appeal, and said this:

"My Lords, the question whether leave to appeal out of time should be given on the ground that assumptions or estimates made at the time of the hearing of a cause or matter have been invalidated or falsified by subsequent events is a difficult one. The reason why the question is difficult is that it involves a conflict between two important legal principles and a decision as to which of them is to prevail over the other. The first principle is that it is in the public interest that there should be finality in litigation. The second principle is that justice requires cases to be decided, so far as practicable, on the true facts relating to them, and not on assumptions or estimates with regard to those facts which are conclusively shown by later events to have been erroneous."

11

Three personal injury cases were then cited, followed by three decisions in matrimonial disputes. His Lordship continued:

"My Lords, the result of the two lines of authority to which I have referred appears to me to be this. A court may properly exercise its discretion to grant leave to appeal out of time from an order for...

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    • United Kingdom
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