Are changes in the law unforeseen and unforeseeable?

In S v S (Ancillary Relief: Consent Order) [2002] 1 FLR 992 Bracewell J considered a wife’s application to set aside a consent order made in September 2000. Under the order she received assets of £1.1m and the husband over £4m. The judgment in White v White was delivered on 26 October 2000. The wife applied to set aside the consent order inter alia on the basis that the development of the law set out in the judgments in White v White was a Barder event (Barder v Barder & Caluori [1988] AC 20), namely a subsequent material or unforeseen change in circumstances invalidating the basis of the consent order.

Bracewell J held that a subsequent change in law might constitute a supervening event and that White was so capable because, although it involved an exercise of discretion, the effect on the outcome in large money cases was very significant. However, the new event had to be unforeseeable, that is, one which was not envisaged at the time of the order and which could not reasonably have been envisaged at that time. What happened in White v White had **been foreseeable. By the time of the consent order, the appeal had already been heard with judgment reserved and the outcome was awaited. The wife and her advisors had known, or ought to have known, that the judgment was in the offing and could have suspended negotiations pending the decision whereas, in fact, she pressed on in the summer of 2000 for the conversion of the agreement into a court order. Her application was therefore dismissed.

The question arose again in the recent case of De Renée v Galbraith-Marten [2023] EWFC 141 (22 August 2023) per Cobb J. The judge considered a father’s application for an order varying or setting aside in part the terms of a previous consent order in relation to a Child Periodical Payments (CPPs) order made under CA 1989 Schedule 1 which was made as a result of inter partes negotiations before Mostyn J. The father’s case was that he agreed the CPPs figure/formula because this had been expressly promoted by Mostyn J as the proper approach to the computation of maintenance above the CMS level and repeated in his judgment (reported at [2022] EWFC 118) but Mostyn J in James v Seymour [2023] EWHC 844 had subsequently promoted a different methodology. The father therefore sought a variation of the CPPs provision to align with the calculation in James v Seymour.

As Cobb J stated at [11] the father’s case:

‘[i]s that it would now be unfair for him to be held to the formula which the judge had earlier explicitly proposed as the correct guideline, when the judge himself now recognises the inequity (or potential inequity in many cases including this one) in the outcome when this formula is applied.’

Further, at [23] that:

‘[t]he father’s case (although he has not exactly put it this way) is that the judgment in James v Seymour is a “subsequent event”, “unforeseen and unforeseeable” at the time his order was made, which “invalidates the fundamental assumption” on which the consent was given and the order was made …’

Thereafter he referred to both FPR 2010 PD9A para 13.5 and Barder v Barder & Caluori.

At [32] Cobb J held that ‘[t]here can also be little doubt that the “guideline” earlier promoted by Mostyn J has effectively been abandoned by his judgment in James v Seymour’. He stated:

‘[34] This is a most unusual situation. I have considered carefully whether it can be said that the judgment in James v Seymour, in which the judge effectively rescinded the guidance which he himself had first formulated more than 20 years ago in GW v RW [2003] EWHC 611 (Fam) and expanded in 2020 in CB v KB, and which he had explicitly proposed to these parties, and which – crucially – had in my assessment led to settlement of the claim in the precise terms set out at [4] of the order, can truly be said to have “invalidated” the “fundamental assumption” on which the consent order was made. Having reviewed the material, I am satisfied that this development does indeed “invalidate” that “assumption” … There are not likely to be many litigants in a financial remedy case who would have felt comfortable in ignoring the clearest of steers from this most distinguished and pre-eminent of financial remedy judges; this litigant accepted the advice, adopted the ‘useful guideline’, and the subsequent consent order was founded upon it. The subsequent James v Seymour judgment has steered the court’s approach in a different direction; this change of direction was plainly unforeseen and unforeseeable at the time of the consent order.’

The relevant paragraphs of the consent order were therefore set aside.

How many other similar cases may follow?

It is worth recalling that the second basis of challenge in S v S – mistake of law – as a vitiating factor ab initio was rejected in part because there would be public policy considerations against setting aside a consent order on such a basis, by reason of the floodgates opening for all orders made in the last quarter of century or more and the principle that there should be an end to litigation must prevail.

In Brennan v Burdon and Others [2004] 1 WLR 1240 2493 (QB) Morland J drew together both mistake of law and change of law. He stated that:

‘[42] I appreciate that there are excellent policy reasons why a consent order in ancillary relief cases should not be set aside on the ground that there has been a supervening event such as a mistake of law or change of law.’

It should also be noted how stringent the test of ‘unforeseeable’ is – or at least ought to be. This issue was considered at length in DB v DLJ (Challenge to Arbitral Award) [2016] 2 FLR 1308 per Mostyn J. He referred at [33] inter alia to Richardson v Richardson [2011] 2 FLR 244 per Thorpe LJ at [86] where he had said that:

‘[c]ases in which a Barder event … can be successfully argued are extremely rare, should be regarded by the specialist profession as exceedingly rare, and should not be thought to be extendable by ingenuity or the lowering of the judicially created bar.’

In the earlier case of Myerson v Myerson (No. 2) [2009] 2 FLR 147 Thorpe LJ had said at [39] that ‘very few successful applications have been reported’.

At [35] Mostyn J stated that the ‘test for Barder relief … is a question of law. Whether it is satisfied is a question of fact. A finding that a later event was, or was not, foreseeable is an inference drawn from primary facts’ and that ‘occasionally the fact-finding exercise seems to have been driven more by considerations of the underlying merits than a faithful application of the question of law’. This echoes the comment in Dixon v Marchant [2008] 1 FLR 655 per Lawrence Collins LJ at [95] that ‘[w]hat 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’.

Mostyn J then considered the civil authorities given that whether an event was reasonably foreseeable is a key question in deciding whether damages are recoverable in an action for negligence for breach of contract, negligence or nuisance, or whether they are too remote and therefore irrecoverable. At [39] he stated that ‘[a]lthough the numeric approach is generally eschewed one can confidently say that for damage to be held to be unforeseeable and therefore too remote the probability of it eventuating must be very low indeed (probably P < 0.05, I would guess)’ and at [40] ‘just how unlikely a future event must be before it can be classed as “unforeseeable”.’

A change in the law may be unforeseen but will other judges agree with Cobb J that a change of judicial direction is unforeseeable?