In the recent case of WA v Executors of the Estate of HA & Others, Mr Justice Moor reduced a lump sum paid to a husband on divorce, due to his suicide just 22 days after the financial consent order.
In this case, the wife was extremely wealthy in her own right. The parties married in 1997 and did enter into a pre-nuptial agreement before the wedding. However, that pre-nuptial agreement was not relied on in full due to the limited steps the parties took before entering into the agreement.
The couple had 3 young children and lived on a £30 million estate during the marriage. Sadly, the marriage broke down in 2014 and the husband took this very badly.
The parties did manage to reach a negotiated financial settlement, whereby the wife would pay the husband a lump sum of £17.3 million on a clean break basis.
The lump sum was to be paid in two instalments of £8.67 million. The first was to be paid within 14 days and the second only once the husband’s mother had moved out of the family estate. The first instalment was paid. However, the second instalment was never paid as the husband committed suicide 22 days after the consent order was made. The husband had left his estate to his three brothers on death.
The wife then filed a notice of appeal in respect of the original consent order agreement, relying on the case of Barder v Caluori  AC 20. The Barder case involved a consent order which was invalidated by a later occurring event. With reference to the Barder case, the wife argued that the fundamental basis of the consent order was that the lump sum was required to meet this husband’s needs and this was now invalidated by his death.
Mr Justice Moor reviewed the relevant case authorities and asked himself the following questions:-
- Was the husband’s death foreseeable?
- If not, was his award a sharing award or a needs based award?
- If it was a needs based award, what order was now appropriate?
The answer to the first question was no, the husband’s death was clearly not foreseeable. His mental health records were assessed and were relatively positive as at September 2014. In respect of the second question, there had been no claim by the husband as to a sharing entitlement and it was assessed as a needs based case. If the sharing principal had been used, the husband’s award was likely to have been less, as most of the assets were non-matrimonial and acquired by the wife before the marriage. Therefore, the value of the award itself demonstrated that the award was based on the husband’s needs as opposed to sharing matrimonial assets.
The third question was then considered. Mr Justice Moor asked himself; “If I had been sitting in court in November 2014, knowing that the husband was to die in less than a month, what would my award have been?”:-
- Sharing: Mr Justice Moor said that a 1/3 share of the wife’s share in the matrimonial home would have been appropriate, i.e. £5 million.
- Needs: Mr Justice Moor rejected the argument that the husband had no needs. For example, the couple had taken on responsibility for the husband’s mother and she needed to be housed. He said that it would not be reasonable to expect that need to be funded from the husband’s own assets. Further, given the length of the marriage and the husband’s contributions, it was held that it would not be unreasonable for there to be an award to enable the husband to make bequests in a Will.
It was concluded that an award of £5 million was appropriate for a needs award in these unfortunate set of circumstances, thereby reducing the husbands share by £12.3 million.
This case is a perfect example of how a significant event, known as a ‘Barder event’, can impact on the validity of a financial consent order.
If you require advice on any issue raised in this blog, or any other family law issue, contact one of our specialist family lawyers on 0161 941 4000.