'Let me speak to my solicitor - there's an unforeseen Barder event happening!' Susan Spencer considers how divorcing couples might cope with the imponderables of property prices and mortgage interest rates


The sad background to Barder v Barder [1988] AC 20 is well known. For a successful appeal out of time on the basis that a 'new event' has occurred since the order for ancillary relief:



- The new event must be shown to invalidate the basis of the order, or a fundamental assumption on which it was made;


- It must have occurred/occur within months of the original order having been made;



- The application for leave to appeal out of time must have been made promptly, and;



- Leave must not prejudice any third parties who have acquired rights in relevant property in good faith and for valuable consideration.



These rules have stood the test of time. They have been revisited, for example, in B v B (Financial Provision: Leave to Appeal) [1994] 1 FLR 219, and have not been changed.



We are currently living in times that are, if not actually more uncertain, feel to be so with the possibility of plummeting house prices and soaring interest rates. How should an uncertain future be addressed in the context of ancillary relief applications, and would either of these possibilities amount to a Barder event if they became reality?



Imagine a financial dispute resolution appointment (FDR) with a modest money case. The wife, aged 32, works part time. There are two children aged nine and seven. The former matrimonial home is worth £165,000 with equity of £95,000. The husband, aged 34, earns £1,600 per calendar month net. There are savings of about £2,500, an endowment worth £26,000 and loan/credit card debts of £37,000, all in the husband's name. The husband has a pension with a cash equivalent transfer value of £25,000; the wife has none.


The wife wishes to remain in the home with the children; to have the property transferred to herself with no charge back and for periodical payments made to herself, with the Child Support Agency (CSA) assessing child maintenance.


The husband wishes to have the house sold; for a small amount from the sale proceeds to be used as a deposit for a new property for himself, the bulk to go to the wife as full capital provision including pension; for all the other available capital to help to pay off the matrimonial debts; and for a time-limited periodical payments order to be made, with no extension possible.


Among the many submissions made, suppose the husband says that the future is not clear. Will interest rates go up? If the home is transferred to the wife, it will have to be on the basis that the husband can pay maintenance sufficient to cover the mortgage.


A sharp rise in rates would mean that the mortgage could rapidly become unaffordable. It would also mean that if the husband did not have all other available capital to reduce the debts, then his general outgoings would equally rapidly rise to an unaffordable level.


The husband can only service the debts, periodical payments and any CSA assessment while rates remain low.


What if house prices slump? The husband urges 'sell now' to take advantage of the current high level of house prices. If the wife is allocated the house on the basis that it represents her capital provisions for the future, and prices fall, she might seek to reopen matters and claim part of his pension.



The husband says his proposals allow the wife to set herself up in a cheaper house and be economically independent within a few years. Certainty is achieved whatever happens to interest rates or house prices. If the wife's proposals were adopted, and house prices slumped and interest rates rose, these would be Barder events. A superior court could extend the timescale of consideration of a Barder event, perhaps up to two years after the order. The current time- limit on reopening matters fails to recognise modern reality, and by barring access to the courts, Barder is not compliant with article 6 of the European Convention on Human Rights.



The wife says as to a Barder event, the matters on which the husband merely speculates would not in any event occur in a catastrophic way, nor within the next few months and, therefore, the point is simply a bad one. The article 6 point is a red herring. There is sufficient provision for appeal in the rules overall for the restrictions in Barder to be article 6 compliant.



What of the judicial approach? Judges would factor into their indications at FDR (or indeed into their final judgment) regard for future economic uncertainty.


As to the article 6 point, Barder is a pre-Human Rights Act decision. It plainly does block access to the courts - that is the point of the decision. Although article 6 does not require the courts to provide endless opportunity for appeal, the restrictions in Barder must be human rights compliant. It is suggested that Barder does comply, save for a possible debate about whether the time- limit of a few months for the catastrophic event to occur is too restrictive. A combination of a house price slump and a large rise in interest rates would not occur within months, but could well undermine the workability of the order in the longer term.


However, given the unswerving adherence of the courts to the notion of certainty and finality in ancillary relief, it seems likely that the Barder timescale would be pronounced compliant by any superior court.



In B v B, the husband complained of a 26% drop in the value of the relevant property in three years, a likely failure of his business, and the remarriage of his former wife. Mr Justice Wall (as he then was) gave the application short shrift. Remarriage would not have affected the wife's capital award. The husband's business position had not, on the evidence, seriously deteriorated. The diminution in the property value would create hardship for the husband, but this did not invalidate the original order.



Even if these events were collectively sufficiently serious, they had not happened within the short timescale envisaged in Barder. In addition, the husband had delayed in applying for at least 11 months after he was aware of the alleged drop in the property price and that delay was of itself fatal.


On the basis of that historic approach, the Barder point would be squashed at FDR. Any sign at final hearing of representatives seeking to lay the foundations of a later Barder application would be overtly addressed in the judgment so as to reduce the opportunity for appeal.



District Judge Susan Spencer sits at Leeds Combined Courts