Friday, January 25, 2008

Dixon v Marchant: a fair decision?

The judgment of the Court of Appeal in Dixon v Marchant, handed down yesterday, may, I think, lead to some debate, and not just amongst family lawyers. It dealt with the vexed question of remarriage shortly after the making of a consent order, and whether it constituted a "Barder event", invalidating the order.

The facts were as follows: On 4th February 1993 an order was made providing, inter alia, that the husband, Mr Dixon, pay his wife periodical payments at the rate of £15,000 per annum during their joint lives or until her remarriage or further order. In August 2005 Mr Dixon's solicitor wrote to the wife informing her that he was about to draw down his pension, that his income would be reduced accordingly and that he had grounds to make an application to vary the maintenance. He requested details of her financial position and asked specifically whether she was cohabiting. The wife's solicitors replied that she had no intention to cohabit and suggested that she would be happy to capitalise the maintenance. After some negotiation this was agreed and on the 25th April 2006 an order was made by consent requiring Mr Dixon to pay £125,000 on or before 1st May 2006. The application for the consent order was accompanied with the prescribed statement of information in which the wife declared that she had "no intention to marry or cohabit at present". She remarried on the 3rd November 2006 and when Mr Dixon discovered this, he applied to set aside the order, "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". The application was refused, and Mr Dixon appealed.

Lord Justice Ward dismissed the appeal, finding that the wife had been honest in stating her intentions when the order was made, and that the basis of the consent order was "no more than the straightforward capitalisation of the wife's periodical payments to achieve the common desire for a clean break" - there was no fundamental assumption "that for an indefinite period to be measured in years rather than months or weeks, the wife would not remarry". He stated that the fact that Mr Dixon "had to take the chance of her remarriage was in accordance with accepted orthodoxy which has prevailed for more than 30 years" and that: "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". Lord Justice Lawrence Collins concurred, but Lord Justice Wall dissented: "In my judgment," he stated, "...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 [in Barder] "for an indefinite period, to be measured in years, rather than months"". He concluded: "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"".

The prospect of remarriage is a regularly recurring theme in ancillary relief cases. Whatever your views upon the decision in this case, it seems that intentions must be made clear in the order. As Lord Justice Ward said: "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".

2 comments:

  1. It would seem sensible in the negotiation of such Orders to insert some condition into the Order which would permit the 'clawing back' of some of the capital payment in the event of re-marriage within a prescribed period. It may be that some people would not be able to agree and it would become a matter for the court. One suspects that the ability to reach agreement may well depend to some extent upon the parties' perceptions of their own prospects of re-marriage. However, in the context of Dixon v Marchant, whilst producing a result which may appear a little unfair on its face, it was the right decision in terms of adhering to strict legal principles; the opposite finding would have been an open invitation to people to come to court under similar circumstances (although perhaps with a longer gap between settlement and re-marriage) to attempt to undo settlements which should, in the absence of a pre-existing agreement and in the interests of finality, be undoable... AD :-)

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