Dixon v Marchant

Where a wife remarries shortly after a consent order has provided for payment of a lump sum to capitalize her periodical payments, does that constitute a Barder-type event which invalidates the basis or fundamental assumption upon which the order was made? On 6th June 2007 His Honour Judge Collis sitting in the Birmingham County Court held that it did not and the husband now appeals with permission granted by Wilson LJ.

The appellant is Mr John Dixon, now aged 64. The respondent is Mrs Josephine Marchant, now aged 59. They married in September 1978, it being a second marriage for each of them. Divorce proceedings started in 1992 and the marriage was dissolved by decree absolute granted on 20th August 1993. For convenience I will, if they will kindly forgive me, nonetheless refer to them as husband and wife.

On 4th February 1993 an order was made by District Judge Cleary that, the husband having purchased a property registered in the sole name of the wife, he pay her a lump sum of £40,000 and periodical payments at the rate of £15,000 per annum during their joint lives or until her remarriage or further order. He complied with the terms of this order.

In August 2005 the husband’s solicitor wrote to the wife informing her that he was about to draw down his pension from Ernst & Young, of which firm he had been a partner, that his income would be reduced accordingly and that he had grounds to make an application to vary the maintenance payable to the wife. He asked for details of her current financial position and her circumstances generally but in particular he asked, “Are you still cohabiting?” Her response through her solicitors was to inform him that her current financial position was “very modest” and that “our client is not cohabiting and does not intend to cohabit”. She added that she too had hoped to be able to agree the matter amicably and suggested that she would be more than happy to capitalise the maintenance for the future. She never sought to increase the amount payable to her.

His solicitors were not satisfied and wrote on 12th September stating that they needed her “to elaborate upon [her] circumstances regarding the statement that she is not cohabiting and does not intend to. We understand Mrs Dixon has had a relationship with a gentleman named Derek since about 1993.” They indicated that her initial response was helpful but it would “depend on other factors and most importantly the position regarding co-habitation.” On 3rd November they reiterated his suspicions, stating, “When the original order was made on 4th February 1993 Mrs Dixon was having a relationship with Derek and we say that remains the case after all these years.”

Cohabitation remained an issue between the parties; yet on 13th January 2006 the husband, whilst not accepting her denial, nonetheless offered to compromise if she would accept a lump sum payment of £75,000 with her claim for maintenance being dismissed. In their response of 26th January 2006 her solicitors said this:

“Our client has done all she can to advise that she does not cohabit and enjoys her own independence. She has no wish or desire or intention to cohabit or remarry, particularly after two unsuccessful marriages. Whilst Mrs Dixon and her friend do enjoy the same interests and get on well, they do not wish to cohabit with one another and do not spend all their time and, by all measures which can be used to ascertain whether parties are cohabiting they are clearly not cohabiting.”

They added:

“Looking at the Duxbury calculations for capitalising the maintenance, these would suggest that our client, at 57 years of age, should be looking to a lump sum of approximately £200,000 and the offer of £75,000 is, therefore, even if other factors are taken into account, too low and is therefore not acceptable. Our client does wish to avoid the costs and trauma of litigation, if at all possible, and, in her view, a realistic offer for capitalisation of her maintenance based upon what we have seen of your client’s financial position would be £150,000.”

His solicitors’ reply on 2nd February was:

“Whilst you state that Mrs Dixon has done all she can to advise that she does not cohabit we simply do not agree. If this matter goes to court we will argue that Mrs Dixon is indeed cohabiting. It is clear to us that Mrs Dixon is not prepared to accept the position purely because of the effect it will have upon her right to maintenance.”

He suggested a “more realistic figure” would be in the region of £100,000.

Her solicitors’ response of 15th February 2006 was to state “categorically” that “she is not cohabiting and does not intend to cohabit and on this she is quite adamant”. She made the suggestion that the parties meet half way and compromise at £125,000. The husband agreed.

The husband prepared an order to place before the district judge for approval. It was in these terms:

“Upon the Husband and Wife agreeing that the terms of this order are accepted in full and final satisfaction of all claims for income, capital and pension sharing orders and Pension Attachment Orders and of any other nature whatsoever which either may be entitled to bring against the other howsoever arising in relation to their marriage

By consent it is ordered that:

1.

The Husband shall pay or cause to be paid to the wife a lump sum of £125,000 on or before 1st May 2006 whereupon

(a)

the order herein of District Judge Cleary dated 4th February 1993 that the Husband shall pay to the Wife periodical payments at the rate of £15,000 per annum monthly in advance shall be dismissed and

(b)

the Wife’s claims for periodical payments and secured periodical payments shall stand dismissed and the Wife shall not be entitled to make any further application in relation to the marriage under the matrimonial causes act 1973 s. 23(1)(a) or (b) nor to apply to the court, on the death of the Husband for provision out of his estate.

2.

No order for costs.”

The application for a consent order was accompanied with the prescribed statement of information in which the wife had to disclose her marital plans in response to which she declared that she had “no intention to marry or cohabit at present” (with emphasis added by me). The order was made by District Judge Wall on 25th April 2006.

On 3rd November 2006 the wife married Mr Derek Marchant. She explained in a statement filed in these proceedings how that came about. She said:

“14.

It is fair to say that this issue [cohabitation] surfaced at sundry times during the negotiations. However it did not seem to matter greatly to the respondent for, as I say above, he already seemed to think that I was cohabiting and so presumably he continued paying my maintenance on that assumption. It follows that if I had admitted cohabiting (which I did not and do not), it would have made little or no difference to the figure we were talking about. In reality it was simply another stick to beat me with.

15.

I would now like to set out the facts. For a number of years, since about 1994 as the respondent well knows, I had been a close friend and companion of Derek Marchant. Although we spent a great deal of time together, and even gone on holiday together, there was no cohabitation between us, nor did we share bank accounts or have any financial interaction. He had his financial responsibilities and I had mine. We had no intention of living together or marrying. As far as I was concerned (and my family knew this) I was never going to marry again.

16.

In August 2006, however, Derek and I visited a friend who was dying of cancer. She was 39 and had two children aged 6 and 7. She had just finished some chemotherapy and was very ill. Derek himself had suffered severe ill-health problems (…), and I have lost friends over the course of the last year through cancer. In short we were in a sombre and reflective mood in the journey back in the car.

17.

Part-way home we decided to stop off for a meal. We felt it was necessary to think about something other than what we had just seen, so we ordered a bottle of wine and just talked. Some way through this process Derek looked at me and said:

“Life’s too short – will you marry me?”

I was a little taken aback but not displeased by what he said, and almost immediately said “Yes”. It was a decision taken entirely on the spur of the moment, but one that I do not regret. I hasten to add that all my family and friends were as shocked as I was when they found out.”

When the husband discovered this, he applied to the district judge to set aside District Judge Wall’s order of 25th April “as new events have occurred since the making of the consent order which invalidates the basis and fundamental assumption upon which the consent order was made, i.e. the petitioner … remarried on 3rd November 2006 having stated that at the time when the consent order was made she had no intention of cohabiting/remarrying.” He later applied for permission to appeal out of time against District Judge Wall’s order on similar grounds.

The judge made this important finding:

“17.

I am going to pause here because if I go back to the husband’s original applications, one for permission to appeal: he had based some of his arguments on the fact that he had been misled and clearly felt he had been lied to by the wife, but through his counsel today, he does not pursue that; there is no evidence he can produce to say that. I accept the position that at the time of the assertions that were made the husband knew there was an ongoing relationship that could develop, he wanted some assurance that they were not cohabiting or going to remarry at that time, and the wife honestly gave an answer that she did not intend to cohabit and she did not intend to remarry. That was the basis upon which the order was made. So there is no deceit or non-disclosure as far as the wife was concerned.”

He referred to Barder v Caluori [1988] 1 A.C. 20 and it will be convenient to set out now some of the observations of Lord Brandon of Oakbrook in that case where the husband transferred his interest in the matrimonial home to the wife who had been awarded care and control of the two children of the family. The order was made on 20th February 1985 and on 25th March an appalling tragedy supervened when the wife unlawfully killed the two children and then committed suicide. Lord Brandon said at p. 40:

“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.”

At page 43 he said this:

“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 financial provision or property transfer made after a divorce on the ground of new events, provided that certain conditions are satisfied. The first condition is that new events have occurred since the making of the order which invalidate the basis, or fundamental assumption, upon which the order was made, so that, if leave to appeal out of time were to be given, the appeal would be certain, or very likely, to succeed. The second condition is that the new events should have occurred within a relatively short time of the order having been made. While the length of time cannot be laid down precisely, I should regard it as extremely unlikely that it could be as much as a year, and that in most cases it will be no more than a few months. The third condition is that the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case. To these three conditions, which can be seen from the authorities as requiring to be satisfied, I would add a fourth, which it does not appear has needed to be considered so far, but which it may be necessary to consider in future cases. That fourth condition is that the grant of leave to appeal out of time should not prejudice third parties who have acquired, in good faith and for valuable consideration, interests in property which is the subject matter of the relevant order.”

Judge Collis noted:

“23.

It is conceded that events 2, 3, and 4 have been met, in other words the short time, the promptness, and there is no third party interest. So it really comes back to whether the first condition of Barder has been satisfied.

24.

I have been referred to various cases by both counsel … They helped to set out some of the views on Barder where events have been supervening. All cases turn on their own facts and the court has to look at whether there has in this case been an invalidation of a fundamental assumption.”

His conclusion was:

“29.

I accept that this was never a planned remarriage and the wife was open and honest, and when she was confronted with the proposal, she accepted it on the basis of the way it was put to her. So in my view, the fundamental assumption was to get rid of the maintenance; the by-line was the fact of the wife saying she was not cohabiting or going to remarry: that was true. In my view, what the wife did not invalidate that fundamental assumption, and as such, I dismiss the husband’s case.”

Whilst I agree with the judge that, because the circumstances in which Barder may be relied upon are so infinitely variable, no great help can be obtained from an analysis of the fact-specific events under discussion in previously decided cases, nonetheless counsel have referred us to a number and I must deal with the more relevant ones where remarriage features. First is Wells v Wells [1992] 2 F.L.R. 66 where the husband transferred his interest in the former matrimonial home to the wife who had custody of the two children of the family. She remarried six months later. Brandon L.J. said at p. 70:

“In my judgment, the order made by the judge, assuming it to have been appropriate at the time it was made, is no longer so. The only justification I can see for depriving the husband of all his interest in the only capital asset of the spouses was the necessity of providing the roof over the head of the wife and children in the foreseeable future. But for the pressing necessity, I think it is clear that the judge would not have made an order as hard on the husband as she felt obliged to make. Once that necessity had been removed, it seems to me the matter must be reconsidered and an order less hard on the husband made.”

Upon analysis, therefore, the fundamental assumption or basis was to be characterised as providing a roof over the head of the wife and the children and that was falsified when she remarried. Remarriage itself was not treated as the new event.

Mr Burles, who now appears for the appellant, relies heavily on Williams v Lindley [2005] EWCA Civ 103, [2005] 2 FLR 710 where the wife was employed by a widower as his housekeeper. After separating from the husband she moved into the widower’s house with both the children. She sought a transfer of the husband’s share of the matrimonial home to her arguing that she wished to return there with the children. Her solicitors categorically stated that her relationship with the widower was merely a contract of employment. The order actually made gave her a lump sum of £125,000 being a 70:30 split of the assets. Within a few months the wife’s employment was terminated and shortly thereafter the wife and her former employer were married. The husband applied to set aside the consent order. Thorpe L.J. identified the basic assumption in this way:

“24.

… The main foundation for the lump sum order of £125,000 was the wife's urgent need, as she put her case, to re-house herself and the children if she were not to have the family home.  That foundation was destroyed within one month by the wife's engagement to Mr Lindley.”

Once again it was her special need for more of the assets to accommodate herself and the family which underpinned the order that had been made. She no longer needed that when she remarried the rich Mr Lindley.

Since the need to accommodate the children was the dominant feature of those cases, I do not see that they throw any significant light on the problem which confronts us in this appeal. The stark fact is that despite the industry of counsel, neither can produce a case where remarriage as such is the one and only decisive event.

The task of the Court is clear enough. It is this: has the basis upon which the order was made or a fundamental, albeit tacit, assumption which underpinned its making been invalidated by subsequent events?

The first thing to observe is that there is nothing out of the ordinary in the circumstances which prompted this particular order as the need to provide a home for the children drove the decision-making in Wells, in Barder and in Williams v Lindley. The basis for making this order was a straightforward capitalisation of the wife’s periodical payments to achieve a clean break on an application under s. 31 of the Matrimonial Causes Act 1973. The principles, upon which reliance was clearly being placed in the wife’s solicitor’s letter of 26th January 2006 ([6] above), were established in Pearce v Pearce [2003] EWCA Civ 1054, [2004] 1 WLR 68 namely, per Thorpe L.J.:

“37.

… Both as a matter of principle and as a matter of good practice, in my opinion the judge had to decide three questions in the following sequence. First he had to decide what variation to make in the order for periodical payments agreed in 1997. An increase was inevitable given inflation and the husband's overall increased prosperity despite the decline in his income. The judge's second task was to fix the date from which the increased order was to commence. That would dispose of the past and present account between the parties. Then, and only then, should he have moved to the future, substituting a capital payment calculated in accordance with the Duxbury tables for the income stream that he was terminating.

38.

Of course I do not seek to put the trial judge in a straitjacket. He exercises a broad discretion at the first stage. Equally at the third stage he exercises a discretion, albeit a narrower one, in departing from the mathematics of the Duxbury tables to reflect special factors which individual cases will regularly generate.”

That leads to the important question in this case: to what extent is the possibility of re-marriage a special factor? There are several reasons for my concluding it is not.

Reverting to Barder and asking what the basis of this order was, it was, in my judgment, no more than the straightforward capitalisation of the wife’s periodical payments to achieve the common desire for a clean break. Payment of a lump sum carried risks for both parties – a risk for the husband that the wife would remarry so that he would have been better off paying her maintenance until that obligation ceased on her remarriage, and a risk for the wife that a lump sum crudely based, on the face of it, on a multiplicand of no more than seven years or so at £15,000 per annum might be exhausted during her life time so that she would have been better off preserving her rights to maintenance from him and his estate. There were no special features to the case: it was a run of the mill compromise.

So one is back to the crucial question. Was there a fundamental assumption made in this case? In the terminology of Barder, that has to be an assumption that for an indefinite period to be measured in years rather than months or weeks, the wife would not remarry. If and in so far as it was an assumption made by the parties, then it must be a common assumption held by both of them, not the unilateral assumption of only one of them. It cannot avail the husband to protest that he thought the deal could be undone if the wife married within a relatively short time of the order having been made, whatever that time might be. The court will not embark upon an analysis of their subjective hopes and fears. It must be an objective test. I venture to think that upon proper analysis the assumption must be one made by (or at least shared by) the court. One looks to the judgment to understand the judge’s reasons for making he order which he did. Even on a consent application it is, strictly speaking, the assumption made by the court not the agreement of the parties which determines the matter. As Lord Brandon said in Barder at p. 40:

“The circumstances that 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.”

All District Judge Wall had before him was the material which good practice prescribed had to be placed before him. He did not have the correspondence. He only had the parties’ statements as to their future marital intentions. All he knew was that the wife had no intention present at that time of any remarriage. Though the agreement could have included whatever recitals were appropriate to spell out any common assumption about a moratorium on the wife’s remarriage, there was nothing in this agreement which would have alerted the judge to the parties intending to give the husband any right to claw back any part of the lump sum if she should remarry soon after the payment had been made. It was not an implied term of the agreement. There was nothing before the court to indicate that she was fettering her right to remarry as and when she chose. She was free to do so at any time. Everyone knew that. I do not see why it should be assumed that she was acknowledging that for an indefinite period she would not marry again.

I am quite satisfied that there was no basis or fundamental assumption, even a tacit one, that the deal would founder if the wife remarried within a relatively short time after the agreement. The risk of remarriage was one the husband had to accept. I would dismiss the appeal accordingly.

I have had the advantage of reading Ward LJ’s judgment in draft. Unfortunately, I find myself in disagreement with it. In my judgment, the judge reached the wrong conclusion. I would, accordingly, allow the appeal and set aside the judge’s order.

I respectfully agree with Ward LJ that the critical question in this case is whether or not Mrs. Dixon’s marriage to Mr. Marchant on 3 November 2006 satisfies the four criteria identified by Lord Brandon of Oakbrook in his well known speech in Barder v Calouri (henceforth Barder) [1988] AC 20 at 43B-E. Ward LJ has set out this passage in paragraph 14 of his judgment, and I need not repeat it. He has also set out the essential facts of the case, which are not in issue, and which, likewise, I need not repeat.

As I understand the matter, it is not in dispute between the parties that the criteria which Lord Brandon identifies as 2 to 4 in the passage from his speech in Barder cited by Ward LJ are satisfied. That is certainly the view I take. As to the second criterion, Mrs. Marchant’s remarriage undoubtedly took place “within a relatively short time of the order having been made”. Whilst being unable to be prescriptive about time-scales, Lord Brandon said of such a period that it was “extremely unlikely that it could be as much as a year and that in most cases it will be no more than a few months”. A supervening event which takes place six months after a consent order is plainly within the Barder time-frame: see also in this regard the decision of this court in Williams v Lindley, [2005] EWCA Civ, 103, [2005] 2 FLR 710.

The third criterion is that “the application for leave to appeal out of time should be made reasonably promptly in the circumstances of the case”. Mr. Dixon made his application on 13 February 2007. The fourth criterion is that the grant of leave to appeal out of time should not prejudice the interests of any third parties who, on the strength of the order in question, have properly acquired interests in the property which was the subject matter of the order. The third criterion is plainly met; and the fourth does not arise on the facts of the case.

We are, therefore, thrown back on the first condition: is Mrs. Dixon’s marriage to Mr. Marchant on 3 November 2006 a new event which “invalidates the basis, or fundamental assumption, upon which the order was made, so that if leave to appeal out of time were granted, the appeal would be certain, or very likely, to succeed?” For the reasons which I will endeavour to give, I think the answer to that question is plainly “yes”.

In essence, the view I take is that (once again to use Lord Brandon’s words ([1988] AC 20 at 40A-B)) there can be doubt that the consent order of 25 April 2006 was agreed between Mr. and Mrs. Dixon, through their respective solicitors, and was approved by the district judge on a “fundamental, though tacit assumption”. That assumption was, to adapt the words used by Lord Brandon in the same passage, that “for an indefinite period, to be measured in years rather than months or weeks” Mrs Dixon would not remarry. That assumption, once again using Lord Brandon’s words, was, in my judgment, “totally invalidated” by Mrs. Dixon’s remarriage on 3 November 2006.

It follows, in my judgment, that the order made on 25 April 2006 is also invalidated. It is equally self-evident that had either party thought or known that Mrs. Dixon would remarry within 6 months of the order; (a) Mrs. Dixon would not have sought such a capitalisation of her periodical payments; (b) Mr. Dixon would not have agreed to pay Mrs. Dixon a lump sum of £125,000; and (c) the district judge could not, as an exercise of judicial discretion, properly have made such an order. Furthermore, the fact of the remarriage makes the order not merely unsustainable, but - on its face – unjust.

For reasons upon which I will expand later in this judgment, the facts of this appeal do not, in my judgment, fall outside Barder because they relate to the capitalisation of an order for periodical payments, alternatively because we are not here concerned with a “clean break” following a substantive order for ancillary relief. There is no authority for the proposition that the principles set out in Barder do not apply in such circumstances and I reject the submission – implicitly rather than explicitly made by Mr. Duckworth for the respondent – that they do not. Rather to the contrary, I take the view that in the capitalisation of an order for periodical payments which is expressed to be (as this one was) “during their joint lives or until the Petitioner’s remarriage or further order”, the question of the payee’s re-marriage is, ex hypothesi, a critical consideration.

Equally as I will endeavour to explain, the case of Duxbury v Duxbury [1992] Fam 62 (hereinafter Duxbury) is, in my judgment, irrelevant in the present context, whereas the decision of this court in Williams v Lindley, to which the judge makes no reference in his judgment, is significant, and does not fall to be distinguished.

As I understand the argument, the whole emphasis of the respondent’s case is on what may or may not happen after a full claim for ancillary relief made pursuant to sections 23 and 24 of the Matrimonial Causes Act 1973 (the 1973 Act). This, in my view, has led to the erroneous proposition that, as Mrs. Marchant’s solicitor put it, in a letter dated 7 December 2006, her remarriage is “just one of those things”, and that Mr. Dixon, as a consequence has no remedy. I disagree.

Nothing in what follows is calculated to cast doubt on the judge’s finding, by which we are plainly bound, that Mrs. Marchant did not seek to mislead Mr. Dixon in the negotiations about her intention to remarry. As Thorpe LJ put it in Williams v Lindley [2005] 2 FLR 710 at 716 (para [22]) “this case is to be clearly categorised as a supervening event case and not a case of a tainted order”. Both parties received competent legal advice before the order of 25 April 2006 was made, and there is no question of any impropriety on either side.

The receipt of competent legal advice by both parties is, in my view, important. In his written submissions on behalf of Mrs. Marchant, Mr. Peter Duckworth argued that, by entering into the consent order, both parties took a risk. I agree with the broad proposition, but not with the identification of the risk. In my judgment, it is quite wrong to characterise the risk taken by Mr. Dixon as being one that Mrs. Dixon would be free immediately to remarry and could do so with impunity. In my judgment, Barder protected him against that risk, albeit that its protection operates within a narrow time-frame.

In my judgment, the short term and immediate risk which Mrs. Marchant took was that, if she remarried precipitously, she would be liable to a Barder attack. The risk which Mr. Dixon took was that if Mrs Dixon (as she then was) remarried outside the immediate Barder period, there was probably nothing he could do about it.

Of course there were other risks, but in my judgment, they are immaterial to the issue before this court. The critical question in the case is and remains: was the remarriage a Barder event? If it was, the consent order of 25 April 2006 must be set aside: if it was not, the order stands. In my judgment, both as a matter of law and on the facts, Mrs Dixon’s remarriage plainly was a Barder event; and it is further my judgment that we are bound on the authorities, including Barder itself, so to hold.

Against this background, I turn to examine the various authorities. The starting point must be Barder itself.

In my judgment, Barder identifies two important principles, which, on the facts of the case, were in conflict. For the intervener, leading and junior counsel put forward an argument which can, I think, properly be described as a variation on the theme that there must be finality in litigation. A short extract ([1988] 1 AC 20 at 28A) gives the flavour of the argument: -

The contrary argument, advanced by leading counsel for the appellant, was to the following effect. Once again, a short extract ([1988] AC 20 at 24C) gives the flavour: -

In my judgment, there is nothing in the 1973 Act, in Barder itself or, indeed, in any of the other authorities to which we were referred, which limits the application of what I will call Barder principles to orders made under sections 21 to 24D of the 1973 Act or which, to put the matter the other way, disapplies its application to the capitalisation of periodical payments by means of a lump sum payment. Mr. Duckworth’s submission to the contrary was, in my judgment, based on anecdote and, as he himself recognised, is unsupportable in principle (see paragraph 47 below). As I have already stated, it seems to me that the payee’s remarriage inevitably looms large in any application to capitalise periodical payments, and self-evidently, a payer is not going to pay such a lump sum if he or she takes the view that there is a likelihood that the payee will remarry in the near future. These matters are, in my judgment, of importance when we come to consider the next case, namely Duxbury.

In his skeleton argument for this appeal, Mr. Duckworth advanced the following “broad submission”, namely:

Whilst accepting that “in principle” it would seem possible for Barder to apply to an application under section 31(7B) of the 1973 Act, Mr. Duckworth advances two arguments for submitting that the circumstances in which it would do so “must be extremely rare”. They are, firstly, the public interest principle that there should be finality in litigation; and secondly, that the task of capitalising periodical payments is “largely a mathematical, rather than fact-finding exercise”. It followed, Mr. Duckworth argued, that there was no competing public interest that cases had to be decided “on the true facts”. In support of this argument, Mr. Duckworth prayed in aid the judgment of Thorpe LJ in Pearce v Pearce [ 2003] EWCA Civ 1054, [2003] 2 FLR 39.

Mr. Duckworth’s first argument is, of course, negatived by Barder itself. The House of Lords did not accept the proposition advanced by counsel for the intervener in that case, and I need say no more about it. I therefore turn to examine Mr. Duckworth’s second argument.

In my judgment, the introduction of Duxbury into the argument in this case is both inapt and liable to mislead. I will explain why. The facts of the case were that Mr and Mrs. Duxbury had been married for 22 years. When, at the end of their marriage, their financial affairs came before the court under the provisions of sections 23 and 24 of the 1973 Act, each wanted a clean break. By the standards of the day, Mr. Duxbury was a wealthy man, and a clean break by way of a lump sum was the obvious answer. The question for the court was: how should it be calculated?

Both in and following the decision of this court in Preston v Preston [1982] Fam 17, there had been criticism of the calculation of a lump sum payable to a wife which simply provided her with a given net income calculated on annuity rates, whilst leaving her with the capital sum untouched. Accordingly, Mrs. Duxbury’s accountant, Mr. Tim Lawrence, devised a computer programme which, based on her life expectancy on the tables, calculated a lump sum for her which would give her a specified income for life (index linked), but on the premise that, over the years, she had access to and spent the capital, with the result that on her death, nothing, notionally, was left. This useful device has become known as the Duxbury calculation, and in the annual publication of the Family Law Bar Association entitled At a Glance there are what have become known as “Duxbury” tables giving a full range of Duxbury calculations for both men and women, ranging, in the latest edition, from a payee aged 40 requiring an index linked annual income for life of £10,000, to the unlikely scenario of a payee aged 80 requiring an index linked annual income for life of £300,000.

The first point to make is that the Duxbury calculation was not, and was never intended to be, a mere capitalisation of periodical payments. For Mrs. Duxbury, it was part of a package: that is to say a part of the relief to which she was entitled as the wife of a wealthy man, whose marriage had endured for more than 20 years.

It was, of course, in this context, that the question of Mrs. Duxbury’s remarriage arose. She was living with an impecunious man (Mr. Black). In the pre White v White [2001] 1 AC 596 language of the day, Mrs. Duxbury was a “fully entitled wife”, who had earned her entitlement to an award under sections 23 and 24 of the 1973 Act. In the words of Ackner LJ, Mr. Duxbury “fairly and frankly accepted that his former wife was entitled for the rest of her life to enjoy a very comfortable, and even luxurious, lifestyle”. In this context, her prospects of remarriage were, of course, irrelevant.

The issue in Duxbury was clearly identified by Ackner LJ in the following terms: -

The trial judge, Reeve J, in a passage cited with approval in this court by Ackner LJ, said this: -

There is abundant authority for the proposition that on a consideration of an applicant’s entitlement at the end of a long marriage, the question of his or her remarriage is usually immaterial for the reasons identified by Reeve J in Duxbury: - see, for example, the line of authority commencing with Wachtel v Wachtel [1973] Fam 72 at 96. It is, however, in my judgment, a non sequitur to assert that because a claim for ongoing periodical payments may be compromised by a lump sum calculated on the basis of a Duxbury calculation, the recipient of the lump sum is free to remarry at will, and that Barder principles have no application. This, in my judgment, is the fundamental fallacy in Mr. Duckworth’s argument.

There is no doubt that the Duxbury calculation has been used – and continues to be used - as a means of calculating the lump sum to be paid when capitalising a claim for periodical payments. In White v White [2001] 1 AC 596 at 609, Lord Nicholls stated the position succinctly, when he said:

The wider Duxbury approach to the making of a financial award was, of course, rejected by both this court and the House of Lords in White v White. Equally, moreover, the Duxbury calculation is plainly not the only method of capitalising periodical payments, and equally plainly, a Duxbury calculation may be inappropriate in certain cases – particularly those where the means of the parties are relatively modest, and / or where the payer’s income is likely to decrease over the years.

The reason for this is self-evident. The Duxbury calculation assumes that the payee’s income will be notionally sustained at a specified index-linked level over his or her life-time. It necessarily follows that the payer’s resources must also be notionally capable of sustaining that level of payment. If the payer’s income is liable to decrease over time – for example due to retirement – then a Duxbury calculation which assumes both a fixed level of income for the payee and the payer’s capacity to sustain it may well be inappropriate.

In my judgment, the decision of this court in Pearce v Pearce is not authority for the proposition that periodical payments have to be capitalised on a Duxbury basis. The ratio decidendi of the case is that stated by Thorpe LJ at paragraph 45, namely that “on dismissing an entitlement to future periodical payments the court’s function is not to reopen capital claims but to substitute for the periodical payments order such other order or orders as will both fairly compensate the payee and at the same time complete the clean break.” This court reversed the decision of the trial judge, who had added additional sums, unrelated to the order for periodical payments, to the capitalisation calculation.

Pearce v Pearce is thus authority for the proposition that it is not permissible to re-introduce extraneous considerations into a capitalisation of periodical payments. In an appropriate “big money” case, such as Pearce v. Pearce, Duxbury can, of course, and will be used as a rule of thumb for making the appropriate capitalisation. It provides that degree of (it must be said artificial) certainty for which family lawyers strive. However, in my judgment, the use of the Duxbury calculation; (a) does not exclude the application of Barder principles, and (b) will be inapt in many cases for the reasons set out above.

In the instant case, of course, it was not open to the court to make a pension sharing order under sections 24B to 24D of the 1973 Act, with the consequence that the second important limb of Pearce v Pearce (that wherever possible “first consideration should be given to the option of carving out of the payer’s pension funds a pension for the payee equivalent to the discharged periodical payments order”) does not apply.

What is, however, significant in Pearce v Pearce, is the manner in which Thorpe LJ suggests that the judge or district judge should go about the task of assessing the capitalised figure. He or she should first assess what the proper figure for periodical payments should be and then address his or mind to the correct figure for capitalisation.

In the instant case, as the point was never litigated, we have no idea what the figure for periodical payments would have been. In my judgment, therefore, the proposition that on a contested basis Mrs. Dixon would have received a lump sum of £200,000 or more is pure speculation.

For all these reasons, I reject Mr. Duckworth’s attempt to introduce Duxbury into this case. The fact that Mrs Duxbury’s prospects of remarriage were irrelevant to her award does not translate into the broad proposition that “the payer of a Duxbury lump sum takes the risk that the payee may cohabit or remarry”. And most certainly, in my judgment, it does not translate into a proposition to be applied to this case that Mr. Dixon had to take the risk that Mrs. Dixon would remarry within the Barder time-frame.

In my judgment, this case has also been bedevilled by the concept of “cohabitation”. Self-evidently, cohabitation is not the same as remarriage. Cohabitation may or may not affect periodical payments. Here, neither party had applied to vary the order over the years in which it had been in force, and the likelihood must be that even if Mr. Dixon had established cohabitation, that fact would not have terminated his liability to maintain his former wife, although it may have affected it. As Mrs. Marchant points out in her statement, Mr. Dixon had been making payments under the order for years, in the belief both that she had left him for Mr. Marchant and that she was cohabiting with Mr. Marchant.

On the other hand, remarriage was critical for the obvious reason that remarriage by the payee brings an order for periodical payments automatically to an end. Mrs. Dixon must have been so advised – indeed, it is what the order says. It is, accordingly, remarriage which is the critical event, and, in my judgment, the event which, in Barder terms, vitiates the fundamental, albeit tacit, basis upon which the consent order of 25 April 2006 was made.

It does not seem to me that there is any profit in revisiting the pre Barder cases. They were thoroughly analysed in Barder itself. However, once it is accepted, as in my judgment it must be, that the Barder principles apply to an order capitalising a previous order for periodical payments, Williams v Lindley cannot, in my judgment, properly be distinguished.

Three points stand out from Williams v Lindley. In the first place, this court accepted in that case that, although there had been no intention to mislead, Barder, nevertheless applied. Secondly, the supervening event was, as here, remarriage, not death. Thirdly, the time-scale for the supervening event is almost identical to that in the instant case.

At paragraph 46 of the judgments in Williams v Lindley, Smith LJ expressed herself in the following terms: -

If that is the right test (and I see no reason to doubt it) its application to the facts of the instant case is, in my judgment, determinative of the appeal in the appellant’s favour. As I have already pointed out, if Mrs Dixon’s remarriage had been foreseen, the order of 25 April 2006 would never have been made. In my judgment, it is as simple as that.

Also significant in Williams v Lindley is Thorpe LJ’s critique of the judgment in the court below. The judge in that case had found that - on “a broad overview of the disparity of “available” capital in the wife’s favour and the disparity of pension provision in the husband’s favour - it was impossible to say that a court considering the matter afresh would be certain, or at least very likely, to come to a different result”. Thorpe LJ criticised that approach, taking the view that once an applicant had established the existence of a Barder event: –

Smith LJ took the same view – see her judgment at paragraphs 48 and 49. In my judgment, these passages are fatal to Mr Duckworth’s fall-back position – that is to say that if the judge’s approach was wrong the result would have been the same anyway. As I have already commented, this is, first and foremost, pure speculation. Secondly, however, as the majority judgments in Williams v Lindley demonstrate, the focus at the leave stage is on the supervening event, and the judge is not required to enter into a detailed investigation of the parties’ up to date circumstances.

As I have already pointed out, the judge makes no reference to Williams v Lindley although it was clearly cited to him. In my judgment, his failure to address this case punches an irreparable hole in his reasoning, and vitiates his conclusion.

I am equally of the view that the weight of authority clearly points to the application of the Barder principles in the instant case. A reassessment was ordered in Smith v Smith [1992] Fam 69. In Reid v Reid [2003] EWHC 2878 (Fam) [2004] 1 FLR 736, Wilson J (as he then was) followed Smith v Smith and held that the death of a wife (albeit aged 74 and in poor health) two months after a consent order amounted to a new event. The question thus was: what would have been the appropriate order at the time, had it been known that the wife had only two further months of life? The answer was that the severe contraction of the length of the wife’s future needs would have led to a significantly different result.

I therefore unhesitatingly reject Mr. Duckworth’s argument that even if the judge was wrong, this court should dismiss Mr. Dixon’s appeal because even if the matter had been fought out, she would have received at least £125,000. That argument is, in my judgment, at best pure speculation. Moreover, it takes no account of the critical importance of the supervening event.

In a detailed Respondent’s notice, Mr. Duckworth argues that: -

Mr Duckworth then cites Williams v Lindley as a good example, and continues: -

I am unable to accept this argument for the reasons I have already given. It is, moreover, a good example of counsel setting up a false target, only to knock it down. In my judgment, there is nothing in Barder which limits its application as Mr. Duckworth argues. The four criteria identified by Lord Brandon (which, if satisfied, open the door to the discretion to set the order aside) are perfectly clear and require no gloss.

I also do not accept Mr. Duckworth’s argument that capitalisation of a periodical payments order is what he describes as a simple “quid pro quo”. In my judgment, his analysis begs the critical question: what is the value of the wife’s claim? If that value, however assessed, is subsequently falsified by an immediate remarriage (which plainly destroys whatever value it had) I see no reason why the event which destroys its value cannot come within the Barder doctrine.

I therefore simply do not accept the premise upon which Mr. Duckworth advances his argument - and all the more so because Mr. Duckworth then applies Duxbury to it, and imports the fallacy that remarriage is always a risk within the Duxbury model. Neither proposition, in my judgment, properly addresses the first of Lord Brandon’s four criteria.

I am further simply unable to accept the gloss which Mr. Duckworth places on what he describes as “the Barder doctrine”, namely that for it to come into play there must be an “underlying basis” or a “shift of wealth in favour of one party that calls for some explanation”. That is not what Barder says, nor can I extract it from the four criteria laid down by Lord Brandon. What Lord Brandon describes is a “fundamental, though tacit assumption”. I have already explained what I think that was on the facts of this case. The simple proposition remains that remarriage can be a supervening event within Barder if it has the consequences identified in Barder itself.

Mr. Duckworth’s fall-back position also involves looking for the “underlying basis” for the agreement / consent order in the correspondence – as, he argues, the judge did. He submits that in the light of the correspondence, it is impossible for Mr. Dixon to say that he accepted entirely that Mrs. Dixon had no present intention to cohabit or remarry and that the order could only have been made on the basis that she had no such intention. He thus submits that: “Self-evidently, there were many reasons why Mr. Dixon sought finality, not least to rationalise his own affairs”.

In my judgment, this argument once again misses the essential point, and does not address Lord Brandon’s first criterion. Was the remarriage a supervening event? And what was its effect on the consent order? I have already answered both questions by reference to the objective facts. It seems to me that Mr. Duckworth – like the judge - is attempting to substitute for the objective facts an irrelevant element of subjective intention.

It follows from what I have already said that I am unable to accept the judge’s view that “the fundamental assumption was to get rid of the maintenance; the by-line was the fact of the wife saying she was not cohabiting or going to remarry”. Whilst I would not wish to take a semantic point against the judge in what was plainly an extempore judgment, the word “by-line” undoubtedly connotes – and I think the judge meant – a secondary or less important consideration. I simply do not accept that analysis, which seems to me not borne out either by the correspondence or the nature of the order agreed. In my judgment, and for the reasons I have already given, it seems to me clear that the fundamental assumption behind the agreement, and critical to the making of the order, was the assumption that Mrs. Dixon would not remarry, in Lord Brandon’s words “for an indefinite period, to be measured in years, rather than months”. The judge found that Mr. Dixon “wanted to end the possibility of a long period of maintenance”; but, of course, there would only be a long period of maintenance if Mrs. Dixon did not remarry.

Equally, and whilst I would not expect an extempore judgment of this kind to be a legal tract, the judge’s failure to address the authorities, and Williams v Lindley in particular, has, in my judgment, led him astray.

I have, I hope, already explained my view that Mr Duckworth’s arguments on what Mrs. Dixon may or may not have received on a contested application are hypothetical and speculative. However, Mr. Duckworth’s suggestion that Mrs. Marchant has not received justice requires an answer, and it is two-fold. Firstly, if I am right, it cannot be unjust to revoke the order of 25 June 2006 if its fundamental basis has been falsified by her remarriage within the Barder time-frame. Secondly, however, I do not accept that Mrs. Marchant’s remedy is necessarily restricted to six months periodical payments at the rate of £15,000 per annum from the date of the consent order to the date of her remarriage. I note in passing that Mrs. Marchant herself is of the same opinion. In paragraph 22 of her statement made on 22 March 2007, which was plainly drafted by her lawyers, she comes out fighting and she says in answer to the current application: -

I hope the foregoing explains why I take the view that this appeal should be allowed. I need, perhaps, for completeness to add that I also find myself in respectful disagreement with Ward LJ in his analysis of the authorities. In Wells v Wells, for example (which was heard in this court by 1980 by Ormrod and Brandon LJJ, but not reported until [1992] 2 FLR 96), the reason the husband was granted leave to appeal out of time was because of the fundamental change in the wife’s situation brought about by her remarriage. Similarly, it was the wife’s remarriage within the Barder time-scales which provided the foundation for this court’s grant of permission to appeal out of time in Williams v Lindley.

In the instant case, as I have already stated several times, it seems to me that the question of Mrs Dixon’s remarriage was critical. I have already considered the question of remarriage in the context of a conventional application for ancillary relief, and for the reasons I have given do not think it is legitimate to import the considerations behind the judgments cited by Ward LJ in paragraph 23 of his judgment into the capitalisation of an order for periodical payments.

I respectfully agree with Ward LJ that the test must be objective, and my view remains that on an objective assessment, the proposition that Mrs. Dixon would not remarry within the Barder time-scale was the fundamental albeit tacit assumption upon which the order was made. I do not agree that “the risk of remarriage” within the Barder time-frame was one which Mr. Dixon “had to accept”. I would, accordingly, allow the appeal.

I agree with Ward LJ that the appeal should be dismissed.

The variation of orders in the family jurisdiction is of course a familiar process. But the importance in finality in clean break cases makes it clear that the application of the Barder v Caluori principle is reserved for exceptional cases. This is because the decision involved a compromise between the principle that it is in the public interest that there should be finality in litigation, and the principle that justice required cases to be decided, so far as practicable, on the true facts relating to them, and not on assumptions or estimates with regards to those facts which were conclusively shown by later events to have been erroneous.

The principle of finality remains fundamental: see, e.g. The Ampthill Peerage case [1977] AC 547 at 569, per Lord Wilberforce; Taylor v Lawrence [2002] EWCA Civ 90, [2003] QB 538, at [6] per Lord Woolf CJ; Zuckerman, Civil Procedure, 2^nd Edition 2006, para 22.40.

The cases in which the Barder principle has been successfully invoked include: (a) the unexpected death of one of the spouses; (b) the remarriage of the other spouse; (c) the reconciliation of the spouses; (d) a change in the law; or (e) a change in the valuation of property: see Bromley, Family Law, ed Lowe and Douglas, 10^th ed. 2007, pp 1064-1069.

In the great majority of reported cases in which the Barder principle has been invoked the relevant conditions for its exercise have been held not to exist. That is because, as Sir Mark Potter said in B v B [2007] EWHC 2472 (Fam), at [43] (adopting what Hale J said in Cornick v Cornick [1994] 2 FLR 1189, at 1196 in a different context): “…the circumstances in which the principle falls for application are very few and far between.”

What distinguishes almost all of those cases in which the principle was successfully invoked from those in which it was not, is that in the former group justice cried out (as it did in Barder) for a remedy. In the most recent decision, Williams v Lindley [2005] 2 FLR 711 (CA), the matrimonial assets were very modest and the husband agreed to a 70:30 split in favour of the wife after he had been assured that her relationship with her employer as a housekeeper was purely professional. Within a few months she married her employer. A retrial was directed.

In Hope-Smith v Hope-Smith [1989] 2 FLR 56 (CA) (a decision on the substantive appeal) the original order gave the wife a lump sum from the proceeds of the matrimonial home which was intended to provide her with a new home. The husband delayed the sale, by which time house prices had risen considerably. The appeal was allowed and a new order was substituted, because if the order had stood, it would have given the husband a windfall and made it more difficult for the wife to buy a home. In Thompson v Thompson [1991] 2 FLR 530 (CA) the husband’s business had been valued at £20,000, but it was sold for £45,000 five days after the time for appealing had expired. The Court of Appeal reversed the circuit judge’s refusal of permission to appeal.

In Heard v Heard [1996] 1 FCR 33 (CA) permission to appeal was granted in another case where the matrimonial assets were very modest: an appeal was likely to succeed in circumstances where the amount for the husband was intended to allow him to buy a new home, and it turned out that the sale of the matrimonial home would result in sums considerably less than anticipated when the order was made. In Middleton v Middleton [1998] 2 FLR 821 (CA) the parties agreed on a 50:50 split on the basis that the family home, which was also a sub-post office would be sold for a figure which would result in net proceeds of £69,000. The husband moved the post office business so that the house lost much of its value, and the net proceeds were only £652. The substantive appeal was allowed and a new order was substituted.

Smith v Smith (Smith intervening) [1992] Fam 69 was a case with parallels with Barder itself. The wife committed suicide within six months of the order. In Barber v Barber [1993] 1 FLR 476 (CA) the order was made on the basis that the wife, who was suffering from a serious liver disease, would survive for 5 years, but she died within three months. In Reid v Reid [2003] EWHC 2878 (Fam), [2004] 1 FLR 736 the wife died 2 months after the date of the order: if it had been known that she had such a short time to live, the severe contraction of the length of her future needs would have led to a significantly different result. In each of these cases permission to appeal was given and a new order was substituted.

Barder was also applied in S v S (Financial Provision) (Post Divorce Cohabitation) [1994] 2 FLR 228 in unusual circumstances, but this decision was doubted in Hewitson v Hewitson [1995] 1 FLR 241, at 244, per Butler-Sloss LJ.

It has often been said that the application of the Barder principle is exceptional, and I am satisfied that the use of that expression is not simply lip-service to the principle. The reported cases, with very few exceptions, apply the principle strictly, and with good reason. In my judgment the facts of this case, which have been fully set out by Ward LJ, fall far below the necessary standard.