On analysis, therefore, there are three possible causes of a difference in the value of assets taken into account at the hearing, each coinciding with one of the three situations mentioned earlier:
[21] Mrs McGrenera therefore submitted that the wife had to meet this higher test. As authority for this submission counsel referred me to paragraph D1[32] of Duckworth's "Matrimonial Property and Finance" :
"The doctrine of Barder , which allows escape from consent orders on proof of a fundamental change of circumstances, must apply with equal if not greater force to agreements."
Duckworth, however, provides no explanation as to why this statement should be correct and counsel was not able to provide any authority as to why it might be so.
WIFE'S SUBMISSIONS
The Edgar and Edgar Argument
[22] Mr Toner submitted that the application of the principles in Edgar and Edgar allowed the wife to ask the court to set aside the agreement between the parties. He sought only to rely on the "important change in circumstances" factor in Edgar .
[23] Mr Toner argued that it was irrelevant how the change of circumstances had come about. He submitted that if the husband had won the National Lottery, then the wife would be entitled to have the agreement reopened. Mr Toner's position was that the agreement only brought "a certain amount of certainty" to the parties. When pressed, he did not, however, have any authorities following on from the decision in Edgar to show how courts have dealt with the matter of unforeseenness. He argued, however, that the "unforeseen" in Edgar must include unforeseen financial circumstances and not just unforeseen life circumstances. He acknowledged that his position was that it was not the inheritance of the land which was unforeseen, it was the sale of the inherited land for such a high price which was unforeseen.
The Barder v Barder Argument
[24] Mr Toner submitted that there was a world of difference between "agreement" cases and "court order" cases. He therefore argued that the assertion in paragraph D1[32] of Duckworth was completely unsound. He submitted that the caselaw provided different tests for different situations. In respect of agreements between the parties which had not been made a Rule of Court, the court should apply the principles laid down in Edgar v Edgar . Where, however, an agreement had been made a Rule of Court, the court should apply the test laid down in Barder v Barder and its subsequent line of decisions.
CONCLUSION
The Consent Order Argument
[25] The consent order argument was, quite properly, not proceeded with by counsel. The order made by the Magistrates Court on 5 December 1994 certainly gave effect to a number of aspects of the agreement but the court had no jurisdiction to deal with property division matters and was not invited to give its approval of the agreement which had been reached between the parties.
The Barder Argument
[26] In Barder Lord Brandon said that the question whether leave to appeal out of time should be given on the ground that assumptions or estimates made at the time of the hearing of a cause or matter have been invalidated or falsified by subsequent events is a difficult one. He described the problem as follows :
"The reason why the question is difficult is that it involves a conflict between two important legal principles and a decision as to which of them is to prevail over the other. The first principle is that it is in the public interest that there should be finality in litigation. The second principle is that justice requires cases to be decided, so far as practicable, on the true facts relating to them, and not on assumptions or estimates with regard to those facts which are conclusively shown by later events to have been erroneous. "
[27] This quotation illustrates why the Barder argument in this case is misconceived. At the point the agreement was entered into, there was no ancillary relief litigation to which it brought an end and in respect of which the finality principle needs to be respected. What there was, was a free-standing agreement between the parties, some of the terms of which were incorporated into a court order dealing with a limited range of issues such as residence arrangements in respect of the children and spousal and child maintenance.
[28] The concept underlying Barder is that the fundamental basis on which a court order has been made has proved to be invalid. Barder and the line of subsequent authorities following it only applies in a situation where there has been an order of the court which one of the parties now seeks to have set aside. This is not that type of case.
[29] In respect of the reference at paragraph D1[32] of Duckworth's "Matrimonial Property and Finance", it may be that the unstated assumption here is that the author is referring to agreements which have been made a Rule of Court and hence form a part of a Court Order. If so, this underlines the point made by Thorpe LJ in Xydhias v Xydhias [1999] 2 All E R 386 of the importance of applications to the court for agreements to be made a Rule of Court and that such are not a rubber stamp. Rather, there is an independent exercise of the court's judgment in the light of the Article 27 factors and the current case law. Once agreements have been made a Rule of Court, the impact is that they can only be set aside by satisfying the more onerous Barder test rather than the Edgar principles.
The Edgar Argument
[30] In Edgar Oliver LJ stated " the court must, I think, start from the position that a solemn and freely negotiated bargain by which a party defines her own requirements ought to be adhered to unless some clear and compelling reason, such, for instance, as a drastic change of circumstances, is shown to the contrary."
[31] Ormrod LJ stated :
"Under s. 25(1) it is the duty of the court to have regard to all the circumstances of the case, and, in particular, to the matters detailed in paragraphs ( a ) to ( g ), and to exercise its powers so as to place all parties, so far as practicable, and having regard to their conduct, just to do so, in the financial position they would have been in had the marriage not broken down. The ideal, of course, is rarely if ever, attainable; so, inevitably, in most cases, the phrase "so far as practicable" dominates the issue, modified, where relevant, by conduct.
To decide what weight should be given in order to reach a just result, to a prior agreement not to claim a lump sum, regard must be had to the conduct of both parties, leading up to the prior agreement, and to their subsequent conduct, in consequence of it. It is not necessary in this connection to think in formal legal terms, such as misrepresentation or estoppel, all the circumstances as they affect each of two human beings must be considered in the complex relationship of marriage. So, the circumstances surrounding the making of the agreement are relevant. Undue pressure by one side, exploitation of a dominant position to secure an unreasonable advantage, inadequate knowledge, possibly bad legal advice, an important change of circumstances, unforeseen or overlooked at the time of making the agreement, are all relevant to the question of justice between the parties. Important too is the general proposition that, 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 an injustice will be done by holding the parties to the terms of their agreement. There may well be other considerations which affect the justice of this case; the above list is not intended to be an exclusive catalogue."
[32] The matter of agreements was further dealt with in MacLeod v MacLeod [2008] UKPC 64 . The decision in MacLeod concerned a married couple who had entered into a pre-nuptial agreement and then subsequently entered into a post-nuptial agreement which affirmed, with some important variations, their previous agreement.
[33] In MacLeod Baroness Hale said :
"41. The question remains of the weight to be given to such an agreement if an application is made to the court for ancillary relief. In Edgar v Edgar , the solution might have been more obvious if mention had been made of the statutory provisions relating to the validity and variation of maintenance agreements. One would expect these to be the starting point. Parliament had laid down the circumstances in which a valid and binding agreement relating to arrangements for the couple's property and finances, not only while the marriage still existed but also after it had been dissolved or annulled, could be varied by the court. At the same time, Parliament had preserved the parties' rights to go to court for an order containing financial arrangements. It would be odd if Parliament had intended the approach to such agreements in an ancillary relief claim to be different from, and less generous than, the approach to a variation application. The same principles should be the starting point in both. In other words, the court is looking for a change in the circumstances in the light of which the financial arrangements were made, the sort of change which would make those arrangements manifestly unjust, or for a failure to make proper provision for any child of the family. On top of that, of course, even if there is no change in the circumstances, it is contrary to public policy to cast onto the public purse an obligation which ought properly to be shouldered within the family. 42. The Board would also agree that the circumstances in which the agreement was made may be relevant in an ancillary relief claim. They would, with respect, endorse the oft-cited passage from the judgment of Ormrod LJ in Edgar v Edgar , at p 1417, in preference to the passages from the judgment of Oliver LJ, both quoted above at paragraph 25. In particular the Board endorses the observation that "it is not necessary in this connection to think in formal legal terms, such as mispresentation or estoppel". Family relationships are not like straightforward commercial relationships. They are often characterised by inequality of bargaining power, but the inequalities may be different in relation to different issues. The husband may be in the stronger position financially but the wife may be in the stronger position in relation to the children and to the home in which they live. One may care more about getting or preserving as much money as possible, while the other may care more about the living arrangements for the children. One may want to get out of the relationship as quickly as possible, while the other may be in no hurry to separate or divorce. All of these may shift over time. We must assume that each party to a properly negotiated agreement is a grown up and able to look after him- or herself. At the same time we must be alive to the risk of unfair exploitation of superior strength. But the mere fact that the agreement is not what a court would have done cannot be enough to have it set aside."
[34] In the absence of undue pressure, unfair exploitation of superior strength, inadequate knowledge or possibly bad legal advice, it is not sufficient, where a party seeks to have an agreement set aside, to show a mere change of circumstances. The circumstances of parties' lives are in a continual state of flux and change. Bank balances, property prices and the stock market rise and fall. Health may improve or decline. Change is ongoing and inevitable for all. As Timothy Scott QC wrote in "MacLeod v MacLeod : Pre-nups, Post-nups and s 35 of the MCA" , an article referred to by Mr Toner, :
"In practice of course the longer the period of time which has passed since any separation agreement, the more likely it is that a material change of circumstances will have occurred."
Does this mean that a party has only to wait for a sufficient time from the making of an agreement until the circumstances have changed sufficiently to constitute a material change ? In my view, this is not the position. As Ormrod LJ indicated in Edgar, it is only an exceptional change of circumstances unforeseen or overlooked at the time of the making of the agreement that justify the reopening of an agreement. At the time the wife entered into the agreement she knew that the husband would, if the natural course of events followed, be pre-deceased by his father. She knew the husband would inherit some land from his father. She knew the land would have value and that the husband might sell it and thereby gain a sum of money. She did not know at the time of the agreement that the husband would make a speculative investment by buying his sisters' portions and that he would be extremely fortunate in that a buyer would find the site desirable for a local amenity. She also did not know the massive amount of the sum which the buyer would pay.
[35] Mr Toner based his application on behalf of the wife on the argument that while the inheritance of the land was foreseen, it was the sale price which was unforeseen. In Myerson Lord Justice Thorpe said
" I echo the words of Hale J that the natural processes of price fluctuation, whether in houses, shares, or any other property, and however dramatic, do not satisfy the Barder test."
In my view the natural processes of price fluctuation also do not amount to "an important change of circumstances, unforeseen or overlooked at the time of making the agreement" as required by Edgar . In addition, the amount received by the husband was due to the fact that he had engaged in post-separation, entrepreneurial activity which involved him in taking an investment risk of entering into a loan arrangement to purchase his sisters' shares in the land. In the circumstances of this case, no proper application of the Edgar principles could deprive a party of the benefit of such an investment.
[36] As the wife's ancillary relief application stands or falls on whether the agreement may be reopened, I therefore dismiss her application.