Mr and Mrs Walkden had entered into a deed of separation providing Mrs Walkden with a lump sum and maintenance. The deed was varied to provide Mrs Walkden with 5% of the value of Mr Walkden’s shares, should the business sell. However, Mrs Walkden negotiated a greater lump sum and a clean break settlement on the basis that she believed the shares to be worth more than husband had said and that she wanted an immediate lump sum payment rather than waiting for any sale of the business.
An agreement was reached between the parties and made into an order of the court in full and final settlement of the wife’s claims.
Three months later the business sold for £3.7 million, as a result of this Mrs Walkden made an application for permission for the court to reopen the consent order on the grounds that the change in husband’s value of shareholding was so dramatic as not to have been foreseen nor foreseeable. The judge granted her application to have the case reopened. Husband appealed and was successful in his appeal.
On appeal the court held that when looking at these cases, they should first look at whether or not there had been mistakes, misrepresentation, fraud, undue influence or breach of duty of full and frank disclosure. The wife argued that there had been a mistake in that the court and the parties has proceeded on the mistaken belief that Mr Walkden’s shares were worth less than they eventually sold for. The wife’s mistake argument failed because there had been no agreement as to the value of the shares. The court then looked at whether or not they was a “Barder event”, an event that has occurred since the making of the order that it frustrates the consent order. The court had already ruled in a previous case that mistake as to value was not an event that could frustrate the consent order. The court held in this case that the event, the sale of the business, was not unforeseen or unforeseeable. The history of negotiation between these parties showed that the sale was anticipated only it happened sooner rather than later. The fact that husband did not disclose to the court that he was approached by a potential buyer could not be classed by the court as a supervening event as the sale was foreseen.
There have been a number of cases asking the court to revisit orders on the basis of an event, after the order has been made, whether as a result of the downturn in the market or as in this case increasing the value of shares. The court appears determined to keep the flood gates firmly closed.
By Helen Bowns