There has recently been a series of Barder appeals, all based upon a significant change in the value of an asset soon after the final order was made. None of them have succeeded. As Thorpe LJ stated in Myerson v Myerson [2009] EWCA Civ 282, ‘very few successful applications have been reported’.

The test was established in Barder v Calouri [1988] AC20, in which Lord Brandon stated that the court may exercise its discretion to grant leave to appeal out of time if the following conditions were satisfied:The test in Barder was further defined by Hale J (as she then was) in Cornick v Cornick (No 1) [1994] 2 FCR 1189, in the context of a change in value of an asset since the date of the original order. Of the following scenarios, only (c) would give rise to leave to appeal out of time under Barder:

  • An asset which was taken into account and correctly valued at the date of the hearing changes value within a relatively short time owing to the natural process of price fluctuation;
  • A wrong value is put upon the asset at the hearing;
  • Something unforeseen and unforeseeable has happened since the date of the hearing which has altered the value of the assets so dramatically as to bring about a substantial change in the balance of the assets brought about by the order.
The principles in Barder and Cornick have recently been considered in the context of dramatic fluctuations in the value of shares and property. In Myerson, the Court of Appeal rejected a Barder appeal brought by the husband where his shares in an AIM company fell by 90% of their value during the year after the original order was made. As Thorpe LJ noted: ‘When a businessman takes a speculative position in compromising his wife’s claims, why should the court subsequently relieve him of the consequences of his speculation by rewriting the bargain at his behest?’

  • New events have occurred which invalidate the basis upon which the order was made;
  • The new events have occurred within a relatively short period of time of the order having been made, that is, no more than a few months;
  • The application for leave to appeal out of time is made reasonably promptly;
  • The interests of third parties should not be prejudiced.

Thorpe LJ held that the test established in Cornick clearly pointed to the dismissal of the husband’s appeal: ‘I echo the words of Hale J that the natural process of price fluctuation, whether in houses, shares or any other property, and however dramatic, do not satisfy the Barder test.’

In Horne v Horne [2009] EWCA Civ 487, due to the decline in the value of his business, the husband had been unable to meet the lump sum instalments he was obliged to pay under the first instance decision. Although the husband’s Barder appeal was initially allowed by the circuit judge, it was subsequently dismissed by the Court of Appeal. Thorpe LJ ­stated: ‘Looking at the authorities as a whole, given that Hale J’s judgment in Cornick has been consistently approved in later decisions, I can only conclude that the true path to be followed by trial judges is the path set by Barder followed by Cornick.’

In Walkden v Walkden [2009] EWCA Civ 627, which has been described as ‘the other side of the coin to Myerson’, there had been no consensus of opinion as to the value of the husband’s shares, although soon after the final order was made, they were sold for a far higher sum than any which had previously been anticipated. The wife’s appeal was rejected by the Court of Appeal as there had been ‘no consensus as to the value of the shares’ and also that the ‘highly speculative value of the shareholding was duly reflected in the compromise’.

Most importantly for practitioners, the decision in Walkden followed the previous decision in Judge v Judge [2008] EWCA Civ 1458 and drew an important distinction between an application to set aside an order based upon misrepresentation or mistake as against an appeal out of time under the Barder principles. Where arguments are being pursued in the alternative, the appropriate approach is as follows:A case of dramatic price fluctuation was considered by Singer J in a Barder appeal brought by the wife in F v S (ancillary relief: application to set aside an order) [2009] EWHC 2377 (Fam). At first instance there had been significant disagreement about the value of the husband’s shares – the husband’s expert contended a figure of £3.7m, yet the wife’s expert suggested £27.2m. About a year later the husband went on to refinance the company and received £137m upon sale.

  • The first question for the court to ask is whether a contract or order has been vitiated by one of the classic elements: misrepresentation; mistake; breach of full and frank disclosure; fraud; or undue influence. If one of those elements is established, then the contract or order was no longer binding.
  • If a vitiating element was not established, the parties to a contract may be relieved of their obligations as a result of a supervening event under the doctrine of frustration. A Barder event in ancillary relief proceedings is akin to frustration.
  • Where a party sought to be relieved of the consequences of an ancillary relief consent order on the alternative grounds of a vitiating element or Barder , then the judge should rule first on the alleged vitiating element and then, if that ground failed, proceed to rule on the Barder event.

The wife’s Barder appeal was however dismissed as the value to be attributed to the company had ceased to be a relevant factor in the award to the wife. If the disclosure of the higher range of valuations had been made, the substantive outcome would not have been different.

More recently, the change in property values was one limb of an appeal brought in Francis v Francis [2010] EWCA Civ 182. Wilson LJ granted the husband leave to appeal to the Court of Appeal on various bases, one of which was a Barder appeal. Unusually in Francis, the appeal was brought by the husband in time and therefore leave to appeal out of time was not required. Upon granting leave to appeal, Wilson LJ expressed the view that the principles of Barder do not apply to a timely appeal, but this is a matter upon which the Court of Appeal will need to give a definitive judgment.

Taking the recent case law as a whole, the door appears to be firmly shut on Barder appeals which are based upon any change in value of assets, whether they are shares or real property. As Collins LJ stated in Dixon v Marchant [2008] EWCA Civ 11, there is a public interest in the finality in litigation.

Andrew Newbury , partner, Pannone, Manchester