What happens if an asset awarded to one of the parties in a divorce settlement should suddenly and unexpectedly lose its value? This is what happened in the case of Barder which gave its name to what are now known as Barder appeals. It can happen in turbulent financial times and the result could well be that the order will no longer makes proper financial provision for one of the spouses. The question will then arise as to whether a significant change in the value of an asset after the final order was made will be sufficient for a court to give permission for an appeal against the order out of time.
The leading case on this is Barder v Calouri . The case sets out the test and conditions which must be satisfied before the court will exercise its discretion to allow an appeal out of time against a final order.
The following must be shown:
- the basis upon which the order was made has been invalidated by new events;
- these new events have occurred within a short time of the order being made and probably not more than a few months;
- there has been no delay by the applicant in applying to the court;
- any third party will not be prejudiced if an appeal is allowed
Even where there has been a dramatic change in the value of an asset after it was awarded to one of the parties, the courts have made clear that an appeal will not be allowed if:
• the asset had been wrongly valued at the hearing;
• the change in value had occurred through natural market forces that had been correctly valued at the hearing.
An appeal will only be considered therefore where something unforeseen and unforeseeable had occurred which resulted in a substantial change in the value. An example might possibly be when shares dramatically nosedived as can sometimes happen after an unforeseeable event. However where a party has speculated on an asset, the court will not relieve that person of the risk of the speculation if things go wrong. If someone has speculated on the rise of a share price he will do so at his own risk and cannot complain if the investment loses value. The natural fluctuation in the value of an investment in property, companies, shares or whatever however dramatic cannot be grounds by themselves to appeal a matrimonial financial order.
However harsh it may seem the courts are reluctant to allow an appeal against a final order and there are few instances where it has been allowed. An example of this reluctance is the case of Horne. Here a husband’s business had collapsed as a result of the recession and he was unable to pay the lump sum ordered. It was considered that the Barder test had not been satisfied as the collapse of the business was only brought about by natural financial forces.
Another case is that of Walkeden. Here a husband who had been awarded shares in the settlement had sold them for far more than had been anticipated. The wife’s appeal was refused on the basis that the highly speculative value of shares was reflected in the settlement.
The courts have always expressed the view that there has to be finality to litigation. Appeals based upon a change in the value of assets are against this principle and therefore not in the public interest. They are therefore unlikely to be allowed in other than exceptional circumstances.