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AC v SC [2015] EWFC B76

Husband’s appeal against the decision of a District Judge in financial remedy proceedings where the District Judge had failed to take into account the agreement that had been reached at the FDR on the term of the maintenance order

At the FDR, the parties came to an open agreement in relation to some of the issues in the case. The agreement (which was recorded on the face of the order) provided, inter alia, that the husband would pay maintenance including spousal maintenance for 5 years with a bar on extending the term. On the basis of the agreements reached, the Deputy District Judge narrowed down the issues for determination at a final hearing.

At the final hearing (where the husband acted in person), notwithstanding the prior agreement, the District Judge held, inter alia, that he was not in a position to be sure that the wife would become self-sufficient and as a result there should be no term for the spousal maintenance.

The husband's appeal was only in relation to the term of the spousal maintenance payments – he sought an order that the payments cease in 5 years with a bar on extending the term, as per the agreement originally reached at the FDR.

The hearing before HHJ Wildblood QC started as a contested hearing of the application for permission to appeal and of the appeal. After only a few minutes of argument it became clear that permission would have to be given and the appeal allowed on the basis that the District Judge had failed to take into account an essential matter, namely the agreement. Faced with the inevitability of the appeal being allowed, the appeal was compromised with the wife agreeing to a term order with a s.28(1A) bar.

Despite the appeal being compromised, in the circumstances of this case the Judge did not consider it sufficient or correct for the appeal to be merely allowed by consent. The Judge stated that "things went hopelessly awry" at the final hearing. He held that:

• The District Judge had failed to take into account the highly relevant factor that an agreement (held to be a 'contractual agreement' per Thorpe LJ in Rose v Rose [2002] 1 FLR 978) had been reached on the term of the maintenance order and that as a result his analysis of the issue was plainly inadequate. Agreements that are reached within financial remedy proceedings are important and a departure from them has to be explained and justified on substantial grounds. The departure had neither been explained nor justified.

• There had been a failure to receive any evidence about why the agreement had been made and why the court should now depart from it. In particular the wife was not asked about why she had agreed to the 'term' at the FDR but now sought to resile from it.

• The express definition at the FDR of the issues to be litigated at the final hearing had wrongly been ignored when the final hearing took place.

Summary by Oliver Woolley, barrister, 1 Garden Court Family Law Chambers


Case No: GL13D00546

Date: 23/06/2015

Before :

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Between :

AC (H) Applicant / Appellant
- and –-  
SC (W) Respondent
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Matthew Brunsdon Tully for the husband
Stephen Roberts for the wife.

Hearing dates: 23rd June 2015
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HHJ Wildblood QC :

1. This is a composite hearing of an application by the former husband for permission to appeal and, subject to permission, of the resultant appeal against the decision of a District Judge in Gloucester in financial remedy proceedings. I will call the parties 'the husband' and 'the wife' for convenience.

2. There was only one point that was raised in the notice of appeal. It states:

'I am asking the appeal court to vary the order….Paragraph 4 of the order relates to global maintenance. Point (d) states: "The payments shall cease on the first of the following events: (i) the death of either party, (ii) the remarriage of the applicant wife and (iii) further order of the court. I am seeking to vary the order with an addition to the above list, stating that the payments shall cease on the 20th September 2019, with a ban on extending the term'.

3. When hearing an appeal I always try to remember the words from King Lear 'take physic pomp' (Act 3 scene 4) for, if I express myself with too much fortitude, I only have myself to thank if similar fortitude is exacted upon me in an appeal on another day. Errare humanum est. With that self-admonition, I regret to say that I think that things went hopelessly awry in the Gloucester Family Court on the afternoon of Wednesday 3rd September 2014. The express definition at a skilfully conducted FDR of the issues to be litigated at the final hearing was ignored when the final hearing took place, inadequate evidence was sought on key issues and simple principles of law were overlooked. A husband, who acted in person and appeared against counsel for the wife at the final hearing, received counsel's skeleton argument only minutes before the final hearing and was not given assistance in identifying the core legal points that arose in relation to the issue raised in this appeal. The FDR was rendered near purposeless. A clear agreement about the duration of maintenance was ignored.

4. This hearing before me started as a contested hearing of the application for permission to appeal and of the appeal. After only a few minutes of argument it was plain that permission to appeal on the single issue before me had to be given and the appeal had to be allowed. Mr Brunsdon Tully had no difficulty whatsoever in showing that the District Judge had failed to take into account an essential (i.e. much more than relevant) matter, namely the agreement. Having spent at least five hours preparing the appeal I was able to express my recognition of the overwhelming merit in the appeal from the outset. The only point that troubled me was whether I should substitute my own order at this hearing or whether I should order a rehearing of the issue before me. Faced with the inevitability of the appeal being allowed, the appeal was compromised with the wife agreeing to a term order with a s28(1A) bar. Notwithstanding the compromise of the appeal I wish to release this judgment to record what has happened since I do not consider that, in these circumstances, it is sufficient or correct for the appeal to be merely allowed by consent.

5. The context of this appeal - On the 7th August 2014 the FDR, at which both parties were unrepresented, had taken place before the experienced Deputy District Judge Louise O'Neill. On the face of the order that was made at that hearing the following preamble appears:

'Upon the basis that the parties (with the assistance of the court) have openly agreed:

(1) that the house will be transferred to the Petitioner with a charge back to the Respondent.

(2) The charge back will become exercisable / triggered by the first of the following:

a) the Petitioner's death;

b) the Petitioner's remarriage;

c) the Petitioner's cohabitation for a continuous period of 6 months provided always that the petitioner has permission to seek to defer the charge in the event of the cohabitation trigger;

d) the youngest child reaching 18 or finishing full time secondary education whichever is the later.

(3) The Petitioner will transfer her shares in CDM to the respondent.

(4) The Respondent will pay maintenance including spousal maintenance for 5 years with a ban on extending the term.

And Upon the basis that the parties have not agreed:

i) the amount of global maintenance nor

ii) the extent/size of the charge back

iii) the means of repayment of HMRC debts

and the court needs to determine those figures at the further hearing listed below, together with the issue of repayment of the HMRC debt has to be reissued at the next hearing'.

6. Paragraph two of the order made by DDJ O'Neill states: 'The matter is listed for a final hearing on 3rd September 2014 at 2.00 p.m. with a time estimate of two hours…to determine the rate /quantum of global periodical payments and the extent/size of the chargeback and the means of payment of HMRC debts'.

7. There was no mention of that order and agreement in the District Judge's judgment at all; the District Judge adjudicated on matters that were said to have been agreed without any reference to it during the hearing. Further, I note, counsel for the wife in his opening note before the District Judge, submitted: 'this is a case where a joint lives basis of payment is appropriate…as well as owning the property, W must be able to finance and run it. That is why the question of periodical payments is important in the present case' but makes no mention in that note of the agreement that had been recorded on the face of the order at the FDR and which had continued to stand as an agreement until the time of delivery of counsel's skeleton argument only minutes before the final hearing started.

8. The FDR order also included a paragraph which stated: 'At least 4 days prior to the final hearing, the parties must liase with each other and agree a joint document which sets out their respective positions on the two disputed issues with a draft order if possible and they must file that document with the court'. That document was filed on 1st September 2014 after the wife had received legal advice and appears at tab seven of the core bundle. It resurrected the issue of whether there should be a 'cohabitation clause' in relation to the sale of the home' but did not suggest any revisitation of the term that was proposed to the maintenance order.

9. In relation to that agreement about the issues that remained to be determined:

i) It was not simply 'part of the discussion at the FDR hearing'. It was an agreement between the parties that was of a continuing nature and which persisted from the time of the FDR until the wife purported to give notice of her change of mind on the morning of 3rd September 2014 through the service on the husband of the counsel's skeleton argument.

ii) The court is obliged at the end of the FDR hearing to 'give directions for the future course of the proceedings'; a definition of the outstanding issues to be decided is part of that process. That is what happened here. The DDJ was entirely right, in my opinion, to narrow down the issues for hearing and express the remaining issues with such clarity. She made an exemplary order at the end of the FDR.

iii) The terms of the agreement were openly displayed on the court's order. That should have been the first port of call at the final hearing. It should not have been ignored.

iv) There is no record of any discussion at the hearing before the District Judge as to whether that agreement should be before the court. Thus there was no argument to the effect that the agreement was inadmissible (nor could there have been). The absence of any reference to that agreement at the final hearing (save for a brief mention in counsel's opening which then was not developed or followed though) is inexplicable.

v) There was no examination in evidence about why that agreement had been made and why the court should depart from it. In particular the wife was not asked about why she had agreed to this at the FDR but then sought to resile from it. The judgment was given on the basis of the District Judge's opinion about what should happen. In deciding what 'should happen' the fact of the agreement was itself an obvious and important factor but was not taken into account.

vi) The judge does start the judgment by referring to the fact that many matters had been agreed. He did not touch on the fact that a term order had been, but was no longer, agreed. He did not raise any questions about the issue at all. At the very least one might have hoped that counsel or the judge would have raised the question: '27 days ago you agreed to a term order, today you no longer do so. Why have you changed your mind?'. I have read the transcript of the hearing in full and it is accepted that there was no evidence about the agreement within it.

vii) If the court was to depart from a term order with an express limitation under s28(1A) it should also have given consideration to the possibility of a term order without such a bar (leaving it to the wife to apply to extend the term if she could show valid reason). That did not happen either.

10. Throughout the argument that has been presented to me on behalf of the wife (and within the District Judge's judgment), there is apparent suggestion that there is little difference between a term order and a 'joint lives' order because the husband can apply to vary. I regard that suggestion as profoundly wrong.

11. Background – The husband and wife are both in their mid 40s.  The wife lives in the former matrimonial home, which has a value of £340k and an equity of £224k, and works for a charity. The husband lives with his new and working partner and is a managing director of a company in which he held 30%, the wife 20%, of the 'A' shares and in which the husband held all of the B shares (the other 50% of the A shares are owned by another). The marriage, in which the District Judge found the parties contributed equally, lasted for twenty years until the parties separated in 2013 and then divorced. They have three children all of whom have their primary home with the wife; two of them are in their mid-teens and one is nearing teenage. Besides the former matrimonial home, the shares and the husband's 20% interest, valued at £38k, in a property, there were no liquid assets of any significance.

12. Many matters before the District Judge had been agreed between the parties. It was agreed that the wife should remain in the former matrimonial home whilst the children remain dependent. The wife agreed to transfer her shares in the company to the husband with the husband bearing any CGT that arose.

13. The District Judge was asked to decide upon the 'trigger events' for the sale of the home (despite these having been agreed at the FDR). He decided that sale should occur when the youngest child reached majority. He also had to decide how the husband's remaining share in the home should be expressed and he ruled that it should be as to 16% of the gross value of the house with an allowance for any enhanced value arising from capital expenditure by the wife (rather than as a fixed sum of £55k as the wife argued). He also decided that an undertaking from the wife to use her best endeavours to procure the release of the husband from the mortgage on the home would be sufficient, rather than a requirement that, if she did not procure his release within a short period, the property should be sold. The District Judge also decided upon the quantum of periodical payments by way of a global figure for wife and children. His order for payment of £1,245 p.m. was based upon a comparison of the parties' budgets and incomes and he ordered that the husband should pay to the wife an amount that met the deficit in her budget and which left the husband with a residual income that almost exactly matched the full amount of his surplus. There is no appeal from any of those decisions.

14. The discussion and evidence before the District Judge - From the transcript of the hearing I note the following:

i) The case began with the District Judge expressing concern about the time estimate and being told by Mr Roberts that 'there are some issues' about the recitals in the order of the DDJ. The husband, who was in person, said that he received counsel's skeleton argument 'about three minutes ago';

ii) At page seven of the transcript Mr Roberts said in opening: 'again, in the recital DDJ O'Neill refers to a five year term with a ban on extending, so I would say that's inappropriate in this case for reasons that I can develop with you and that this is not a case that would fit into a non-extendable term'. The reasons were not given in opening, however, because the discussion then turned to whether evidence was required and, when it was decided that the case could not be dealt with on submission, the wife went into the witness box [4(8)]. That was the extent of the discussion and analysis about the recitals in the DDJ's order. The issue was never developed or analysed.

iii) The wife said that she accepted that she would have to go into a full time career but did not know what she wanted to do [4(11)]. She was not asked any questions about the agreement that had been reached before the DDJ or about the termination of her maintenance in five years time. She said that she would like to remain in the home whilst the boys need it [4(12)].

iv) The wife said that she recognised that she would have to have a new career in place in two years time [4(17)].

v) After the evidence finished the District Judge said that he would give the parties a break for five minutes. He explained to the husband that he wanted to hear him on the issues that were outstanding and defined these as being: i) how the husband's share of the former matrimonial home should be expressed; ii) whether cohabitation should trigger the realisation of the husband's share in the home and iii) whether the maintenance should be governed by a trigger that it should cease if the wife cohabited (4[30]). The question of a term order was not identified by the District Judge as being an issue that the husband should address in his closing speech.

vi) When the husband did address the court he accepted that the spousal maintenance should not end on cohabitation and that it would be sufficient for him to be able to apply to vary in that eventuality [4(31)]. Further, he said that he would agree to the sale of the home only being ordered with the court's further leave in the event of cohabitation by the wife [4(32)]. The District Judge then asks for the husband to address him on the quantum of periodical payments and then says 'does that cover the disputed items? I think it does, doesn't it?' Thus the husband was not asked to deal with the term of the order and whether there should be the bar that had been agreed before DDJ O'Neill.

vii) It was only in his closing speech (which came after the husband had advanced his speech) that Mr Roberts set out his arguments as to why a term order was not appropriate. He did so without any reference to the agreement before the DDJ. This can be seen at 4(39) of the appeal bundle. Mr Roberts cited C v C (Financial Provision: Short Marriage) [1997] 3 FCR 360 in which Ward LJ said at page 381-2 of the report: 'It is highly material to consider any difficulties that the payee might have in entering or re-entering the labour market, resuming a fractured career and making up any lost ground. The court cannot form its opinion that a term is appropriate without evidence to support its conclusion. Facts supported by evidence must therefore, justify a reasonable expectation that the payee can and will become self sufficient. Gazing into a crystal ball does not give rise to such a reasonable expectation. Hope, with or without pious exhortations to end dependence is not enough'. Mr Roberts went on to submit: 'Sir, I hope that it isn't in your mind to think about a section 28(1A) ban but if it was then I would strongly urge you not to go down that route because its very clear that you only have a 28.1A ban if there is certainty, and clearly you don't have certainty by any means in this case. But, sir, my primary position is that applying the words of Ward LJ this (a few inaudible words on the transcript) case, and if circumstances change in the future then the result is the resolution is to come back to court and make an application to vary, simple as that'

15. The judgment about the duration of periodical payments – This is anything but a big money case. The incomes are modest. The husband has a net income, on the findings of the District Judge, of £2,777 net p.m with a personal budget of £1,077 (which included some payments for the children's shoes etc which the District Judge thought the wife would take over as part of her expenditure from the maintenance – see para 22). The wife's income was found to be £1,659 p.m. with a budget of £2,740 p.m. (plus the expenditure in para 22).

16. The District Judge recorded of the wife that, due to her primary responsibilities to the children, she is not able to improve her income for the next two years but envisaged doing some training to prepare for that. She had negotiated a fixed rate mortgage on the former matrimonial home for two years and at the end of which period she recognised her state benefits would also reduce as the eldest child achieves majority.

17. On this issue the District Judge said (and I set it out as it appears in paragraph seven of his judgment): 'I applaud her ambition to do that and her intent to do that, but I am not in a position to be sure that it will come off. That is significant because if I was to say I have heard what the wife says she wants to do and therefore am going to make a finding that in a few years time she will be earning twice as much as she is now, three times. That would be what has been referred to in the case that Mr Roberts pulled out, but it has been referred to in other cases in the Court of Appeal, as the judge gazing into a crystal ball and you simply cannot do it.  There is no evidence that the wife will definitely be earning more in two years' time or even in five years time. Now, do not forget, and I think this has been highlighted several times, that maintenance or periodical payments orders for spousal maintenance are variable, either party can apply and if they can satisfy the court that circumstances have changed, for better or worse as the case might be, the court can consider a variation, but to build in from the word go that an order is only going to last for X number of years the court will only do that where on balance it is satisfied that the wife will be self sufficient and can adjust without unreasonable hardship to not having any maintenance from the husband'.

18. Having dealt with the duration of the order at the outset of his judgment in the above passage, he went on to say at paragraph 18: 'Let us move on to periodical payments…I have already, slightly out of order, adjudicated on the term, there will be no term. [The husband] does not seek to put anything in about the periodical payments if [the wife] co-habits because he accepts that he could apply for variation…'. At paragraph 28 he again says: 'I have already dealt with the term, the fact that there will not be a term'.

19. The District Judge therefore makes plain that his adjudication on the duration of the periodical payments has been made in paragraph seven of the judgment. Nowhere in that paragraph does he make any mention of the agreement that had been reached at the FDR. He had no evidence or analysis to consider on the issue of the agreement because none had been sought or proffered.

20. After the judgment - After the judgment the husband wrote to the court asking for clarification of two matters. The first was whether there was a 'cohabitation trigger' on the charge relating to the former matrimonial home (an issue that is not litigated in the appeal) and the second was whether there was a term bar on the order for periodical payments. The judge replied [8(5)]: 'Spousal maintenance – again DDJ O'Neill did not make an order but recorded an agreement; also again, the agreed statement of positions shows different positions…that is the basis on which I made the order. A term is not appropriate for the reason that I gave in my judgment'. The husband submits, correctly, that the District Judge was simply wrong to say that the joint statement shows disagreement about the term bar.

21. Application for permission to appeal. Under rule 30.3(7) of The Family Procedure Rules 2010 'permission to appeal may be given only where – a) the court considers that the appeal would have a real prospect of success or b) there is some other compelling reason why the appeal should be heard'. The preferred view, as I understand it, is that 'a real prospect of success' means one that is realistic rather than fanciful and does not mean a greater than 50/50 chance of success (per Moor J in AV v RM [2012] EWHC 1173 (Fam), [2012] 2 FLR 709, rather than the test suggested by Mostyn J in NLW v ARC [2012] EWHC 55 (Fam), [2012] 2 FLR 129). I accept that preferred view.

22. Appeal – Under Rule 30.12 of the 2010 Rules it is provided that:

(1) Every appeal will be limited to a review of the decision of the lower court unless - …(b) the court considers that, in the circumstances of an individual appeal it would be in the interests of justice to hold a rehearing;

(2) Unless it orders otherwise, the appeal court will not receive: a) oral evidence or b) evidence which was not before the lower court.

(3) The appeal court will allow an appeal where the decision of the lower court was a) wrong; or b) unjust because of a serious procedural or other irregularity in the proceedings in the lower court'.

23. The powers of the court when hearing an appeal are set out in Rule 30.11(2) of the Rules and include a power to order a re-hearing.

24. In V v V (financial relief) [2005] 2 FLR 697, having referred to the previous provisions governing appeals under the Family Procedure Rules 1991 (as amended in 2003), Coleridge J said: 'That position, as set out in the rules, followed the Court of Appeal's decision in Cordle v Cordle [2001] EWCA Civ 1791, [2002] 1 WLR 1441, [2002] 1 FLR 207, where it was emphasised that any appeal from a decision of a district judge in ancillary relief proceedings should only be allowed if it had been demonstrated that there had been some procedural irregularity or that, in conducting the necessary balancing exercise, the district judge had taken into account matters which were irrelevant, or ignored matters which were relevant, or had otherwise arrived at a conclusion which was plainly wrong. Accordingly, my function in relation to this appeal is the same as in relation to any other such appeal; namely, to review the process undertaken by the district judge to determine whether or not he fell into error in the steps which he took and in the analysis which he brought to bear. I do not start from scratch'. 

25. Although I now operate under The Family Procedure Rules 2010, the impact of the new rules is no different to that set out by Coleridge J in the above passage unless it were to be argued, which it has not been, that this is an evaluative rather than discretionary exercise (in which case the appellant would have an even lower hurdle to surmount).

26. The skeleton arguments – Mr Brunsdon Tully has filed a very impressive skeleton argument. Even before he gets to the passages where he makes submissions of law (which I will consider later), he makes these points:

i) The attempt by the wife to depart from the agreement that had been reached in relation to an order under s28(1A) should have been a) made on time, b) 'signalled clearly with a big red hand, particularly given the two hour time estimate and the fact that the husband was acting in person' and c) argued properly.

ii) The issue of whether there should be term order was not raised in evidence at all. As he says: 'W did not give evidence that she did not think that she could adjust to a termination of her spousal periodical payments within 5 years'. Much more than that, she was not asked at any point: 'Why did you make this agreement with your former husband?'. The husband was not asked to deal with the issue either in evidence. When the District Judge defined the issues that the husband needed to deal with in his closing address, various issues were suggested to him but he was not asked to deal with the question of whether there should be a term order; that, says Mr Brunsdon Tully is obviously unfair and procedurally irregular

iii) After Mr Roberts addressed the court in his closing speech on the issue of whether there should be a term order (in submissions that made no reference to the earlier agreement), the husband was not invited to make submissions on that issue in response even though, as a litigant in person, he had not been asked to deal with this issue in his closing address. When the District Judge had asked the husband to clarify his submissions he did not ask him about this point.

iv) The District Judge did not analyse at any point in his judgment the implications of the agreement that had been reached in relation to a s28 (1A) bar. He expressed his own view about whether a deferred clean break was appropriate but did so without considering the agreement and without having asked the wife 'why did you agree to this if you did not think that you could be self sufficient at the end of the term that you agreed?' Further, he did not consider whether the wife had been assisted with legal advice in relation to the issue of a deferred clean break (she plainly had consulted solicitors when she filed the joint statement).

v) When the District Judge was asked after the judgment to clarify why he had not made a term order he did not have the material upon which to respond to the question (since he had not sought evidence or argument about the circumstances of the agreement). At that stage therefore he could not say more than he did, namely 'although a term order may have been agreed I don't think it was appropriate'. However, absent evidence and argument at trial he simply did not have the material on which to judge the issue.

27. Each of those points made by Mr Brunsdon Tully is entirely valid. At no point was there developed argument as to implications or merits of the agreement that the parties had reached at the FDR. The issue did not make it on to the agenda at all. The only time that there was any argument about the merits of a 'term order' was in counsel's closing speech. The District Judge dealt with the issue on the basis of what he thought was appropriate without any reference to the agreement that the parties had made. That agreement was not just a floating factor in the case. It was an important point since:

a) Parties should be encouraged to agree issues in family litigation;

b) Where agreement is reached any attempted departure from it has to be justified – the question that inevitably arises is: 'what vitiating factors are suggested?';

c) Where the court records on the face of an agreed order that specific issues only are to be litigated that agreement should not simply be ignored in the future hearing. If there was to be an attempted departure from those agreed issues or a redefinition of them that should have been done on notice and should have occurred openly. To do otherwise entirely negates the purpose of the earlier hearing or, as Mr Brunsdon Tully says 'the message will be sent to judges conducting FDRs involving one or more litigants in person that they are not worth the paper they are written on'

d) It also raises important issues of fact, especially the question of whether the wife can adjust without undue hardship to the termination of her claim to periodical payments. If there was to be a departure from the agreed term order, how could there not have been a question to the wife: 'Since 7th August and until today, 3rd September, you have signalled your agreement to a term order even after you consulted solicitors. Why has your position about your ability to be self-sufficient changed?'.

28. Mr Roberts contends that:

i) The without prejudice nature of an FDR should be respected. Although Mr Roberts doesn't set out the Practice Direction in his skeleton argument, it is correct to say that PD9A states at paragraph 6.2: 'In order for the FDR to be effective, parties must approach the occasion openly and without reserve. Non-disclosure of the content of such meetings is vital and is an essential prerequisite for fruitful discussion directed to the settlement of the dispute between the parties. The FDR appointment is an important part of the settlement process. As a consequence of Re D…, evidence of anything said or any admissions made in the course of an FDR appointment will not be admissible in evidence, except…[in circumstances that do not apply here]. However, Rules 9.17 (6) and (9) state: 'Parties attending the FDR appointment must use their best endeavours to reach agreement on matters in issue between them….if the court does not make an appropriate consent order…the court must give directions for the future course of the proceedings'. It cannot be right to say that, if the parties agree various issues at the FDR to the effect that the future litigation is narrowed down to certain specific points, the court cannot define the issues that are to be litigated and commit them, by consent, to the face of an order made at the FDR. Further, the agreements that were reached were not simply part of the FDR process; they continued in existence between the parties after the FDR and represented their open positions. There was no cloak of confidentiality to be cast over the fact of the agreement that had been reached. There was nothing confidential about it at all; it could hardly have been made more open;

ii) The District Judge, Mr Roberts says, was obliged to consider all of the s25 factors, including s25A and 'that is precisely what the DJ did'. I regret to say that is simply incorrect. Agreements that have been reached between parties are important and must be considered as part of the s25 exercise (if it really is necessary to cite authority on this then Edgar v Edgar [1981] 2 FLR 19 and Xydhias v Xydhias [1999] 1 FLR 683 provide it).  Further s 25(2)(a) includes the words 'including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire'. The District Judge did not examine the issues of fact created by the agreement (why was it entered into?) and did not consider the implications of it either (why, within the agreement, did you accept that you could be self sufficient when now you assert you cannot?).

iii) The joint document filed after the FDR does not make any reference to the term order for periodical payments; thus, Mr Roberts argues, it signals that the wife seeks to depart from the previous agreement about a term order. I disagree with that submission. The joint document was ordered to 'set out their respective positions on the two disputed issues'. Nothing in that document signalled that the wife was saying: 'I agreed a term order then but I give notice that I do not agree it now'.

iv) The judge at the FDR is not making a decision whereas the judge at the final hearing is. That, again and with respect to Mr Roberts, completely misses the point. It is not a question of the judge making a decision at the FDR. It is a question of the parties having agreed an important matter within the litigation and having to justify a departure from their agreement. Issues may well be severable within family litigation and, in the context of this litigation, the issue of a term order was an entirely severable point.

v) There was nothing unfair about the handling by the District Judge of the case. I profoundly disagree. What was plainly unfair, in my opinion, was for this issue to have been dealt with in the way that it was. The husband should not have been left dealing with the issue without proper notice. There should have been evidence on the factual underlay of the agreement. Obvious questions about the agreement should have been asked at the hearing and that task should not have been left solely to the husband as a litigant in person.

vi) Devoid of any reference to the agreement that the parties had made, the District Judge was correct to reject any s 28(1A) bar. Mr Roberts then goes on to cite C v C. However, again, that simply misses the point since it sweeps aside the agreement that had been reached. The court could not be accused of crystal ball gazing when the wife had herself accepted for about a month before the hearing that she could be self sufficient at the end of the term.

vii) There are no discretionary failings that are revealed within the judgment that would be sufficient to warrant permission to appeal or an allowing of the appeal. Again with respect there is one very major error in the discretionary exercise – a failure to take any account of the prior agreement and the failure to receive evidence on an attempted departure from a point that was very clearly and rightly flagged up on the face of the DDJ's order as having been agreed. Thus the District Judge failed to take into account a highly relevant factor.

viii) The making of a joint lives order leaves the husband in no worse a position than he should be since it is always open to him to apply to vary. I have no difficulty at all in rejecting that submission. There is a huge difference between a 'joint lives' order for periodical payments and a term order. The difference is in no way bridged by it being said that the husband can always apply to vary the joint lives order.

29. Mr Brunsdon Tully made these further submissions when faced with discussion with me at the hearing as to whether, having allowed the appeal, I should direct a rehearing or whether I should substitute an order of my own:

i) It was the choice of the wife and her team not to advance any allegedly vitiating factors in relation to the agreement. Having chosen that course she should not be given an opportunity to advance them now at a rehearing.

ii) There is no Respondent's notice under Rule 30.5 of The Family Procedure Rules 2010. If the wife sought to contend that the District Judge's order should be upheld on the grounds that there were vitiating factors that went unpronounced at the hearing, that would fall squarely within Rule 30.5(2)(b) ('a respondent who… wishes to ask the appeal court to uphold the order of the lower court for reasons different from or additional to those given by the lower court, must file a respondent's notice.

iii) There is now no basis for suggesting that any vitiating factors exist. None has ever been argued.

30. Submissions in relation to the authorities – Mr Brunsdon Tully argued that, on the issue of periodical payments there is an 'unperfected order of the court' arising from the FDR and the District Judge was bound to adhere to it (he submitted: 'the District Judge had no power to revisit' it). He cited Rose v Rose [2002] 1 FLR 978.  The circumstances of Rose v Rose were very different as Mr Brunsdon Tully accepts ('plainly the agreement recorded by DDJ O'Neill is not on all fours with that in Rose'); in Rose, the only terms that needed to be negotiated were resolved and agreed at the FDR. The husband and wife settled the case entirely on the basis of a clean break order which left the husband paying the wife £3.5m. Therefore, the whole case settled at the FDR and there was nothing more to do other than draw up the order in the terms that had been agreed. Thus the issue in Rose was whether the husband could resile 'between the making and the perfection of the order'.

31. I note that in paragraph 44 Thorpe LJ said: 'the whole purpose and effect of the FDR would be lost or compromised were parties free to analyse and re-evaluate a crucial decision of the previous day or previous week and to decide on further reflection that they made the wrong choice'. I have thought about that passage carefully and would not have found the issue raised by Mr Brunsdon Tully easy to resolve.

32. In this case it would not have been open to DDJ O'Neill to have made a term order for periodical payments at the FDR because other parts of the periodical payments order were not resolved, in particular quantum (a completed order for periodical payments with a variation application at the final hearing would have been a fictional approach to what was occurring at the FDR and was not the basis of the agreement). I did not hear completed argument on this point (because the appeal collapsed midway) and so I do not have to determine the point. But the preliminary view that I expressed was that, in this case, the order of the DDJ recorded a 'contractual agreement' (per Thorpe LJ in Rose) rather than an unperfected order.

33. I was also referred by Mr Brunsdon Tully to the case of Murphy v Murphy [2014] EWHC 2263 (Fam). That case is also very different on its facts, as Mr Brunsdon Tully accepted. There, 'almost all' issues were resolved at the FDR and a final order for 'ancillary relief' was made then, leaving the two questions of 'step down' and whether term maintenance should be ordered as the only matters to be resolved at the final hearing. Holman J decided on the evidence that there should be no step down and there should not be a term order (para 30). There was no challenge to the orders that had been made at the FDR; the case is an example of the judge determining the two issues that were expressly left before him following an FDR. Therefore I do not think that it helps a great deal with the current case.

34. What is perfectly plain is that there was a clear agreement that a term order should be made. I do not think that it is necessary to give an extensive analysis of the well known cases of Edgar (ibid) and Xydhias (ibid). Agreements that are reached within ancillary relief proceedings are important and a departure from them has to be explained and justified on substantial grounds. As was said by Thorpe LJ in the case of Hill v Haines [2007] EWCA Civ 1284 at para 56: 'once parties have reached an agreement to compromise an ancillary relief claim the court will not permit either party to renege save in exceptional circumstances. This proposition was established by this court in Edgar v Edgar [1980] All ER 887. As Lord Justice Ormerod put it: - 'formal agreements, properly and fairly arrived at with competent legal advice, should not be displaced unless there are good and substantial grounds for concluding that injustice will be done by holding the parties to the terms of their agreement'.

35. Further, the agreement in this case raised the clear issues of fact that I have already stated (i.e. why does the wife now say that she cannot be self sufficient at the end of the term). That issue was never examined in the hearing and was not addressed at all by the District Judge by reference to the agreement in his judgment. The District Judge did not take any evidence on why the wife sought to depart from the agreement that she had reached.  It was simply not enough for the District Judge to express his view about a term order without incorporating within his judgment an analysis of the agreement that had been reached.

36. I do not think that it is helpful, correct or necessary to view what happened before the DDJ as a 'partial agreement' which, because it only addresses part of the financial remedies in issue, should be regarded as less cogent. The agreement that was reached was clearly expressed and part of that agreement was that the parties would only litigate certain issues. The agreement therefore is not partial; it is an agreement that is a full consensual acceptance that only some defined issues should be litigated. It is a full and complete agreement defining the issues that remain. I have been referred to the Hong Kong case of L v C CACV 169/2006 & CACV 18/1/2006 and note, in particular, what is said about agreements that deal with only part of the matrimonial assets at paragraph 53. The judge, Hon. Stock says at paragraph 54: 'I see no reason why those principles [in Edgar] should not in such circumstances apply'; I respectfully agree but also think that the very fact that the parties have agreed that only some issues should be litigated raises Edgar type considerations.

37. Thus the answer to the point is not for it to be said: 'The District Judge did consider whether he thought there should be a term order' because the response to that is: 'But, by ignoring the agreement and in failing to take relevant evidence, his analysis of that issue was flawed'.

38. Even now I have no idea what the wife would wish to say about the agreement that was reached. I have no idea what she would want to say about her ability to be self-sufficient after five years from the date of the FDR; I merely have her counsel's assertions which arose in the procedurally irregular manner that I have stated. I do not have any of the evidence about suggested vitiating factors that the wife might now seek to assert because no evidence was given or sought on this issue by anyone at the hearing. As a litigant in person the husband should have been assisted with this point at the hearing and someone should have asked the wife to explain her position properly in evidence.

39. Conclusion – I had no difficulty at all in accepting that permission to appeal must be given on the single issue before me. I had no doubt that the District Judge failed to take into account the highly relevant factor that an agreement had been reached on the term of the maintenance order and that his resultant analysis of the issue was plainly inadequate. Thus the appeal had to be allowed. The parties agreed that the order of the District Judge should be substituted by an order that contained a bar under section 28(1A) of the 1973 Act.

40. It is highly regrettable that people of such modest means should have been caught up in this expensive and flawed process. These are two hard working parents with three children who have had to face the sadness, disruption and financial burden of divorce. As I understand it, this was their first experience of the family court and they attempted to approach this case as litigants in person for most of the time. I can only imagine the tales that they will tell about the operation of that system. I asked them both not to turn the anger that they must undoubtedly feel about these experiences onto the relationship that they must still have with each other as parents of their much loved children.

HHJ Stephen Wildblood QC
23rd June 2015.