A recent family law case concerned an application by a husband for an order varying the payment date of a lump sum to his ex-wife of £1.1m. The sum was due for payment on 19 June 2023 pursuant to a consent order made by Mrs Justice Roberts on 10 December 2018. The husband initially applied to vary the date for payment by a year, to 30 June 2024, but subsequently sought a two year extension, to 30 June 2025.

In this article, paralegal Jake Avdiyovski examines the decision in H v GH [2023] EWFC 235.

Background

The husband said in his variation application that he was unable to pay the lump sum by the due date as Lloyd’s of London was holding his funds via the Special Reserve Fund, preventing him from withdrawing the required sum. Pursuant to Mrs Justice Roberts’ original order upon divorce, payment of the lump sum was secured by a mortgage over the husband’s flat.

Following non-payment of the lump sum by the due date, the wife issued a claim for possession of the flat, relying on the mortgage security provision for the lump sum. In October 2023 the court ordered the husband to give the wife possession of the flat later that month, and gave judgment in the sum of £1.1m. The husband sought permission to appeal, which was subsequently denied.

Wife’s application to strike out

In November 2023, the wife issued a cross-application to strike out the husband’s variation application on the following grounds:

• the court lacks jurisdiction to extend the time for payment of a lump sum for a period of two years, and
• the variation application was a collateral attack on the October possession order.

The judge, Mr Simon Colton KC, struck out the husband’s variation application on the basis of a lack of jurisdiction. The judge considered the wording used in Hamilton v Hamilton, where it was held the court could not extend the payment of a lump sum order by “any significant period”. In the Supreme Court case of Birch v Birch, the court’s inherent jurisdiction was described as directing a “modest extension of time”.

The question in this case was, therefore, whether a two-year extension fell within the “modest” and “not… significant” period which the court has jurisdiction to grant. Counsel for the wife asserted a modest extension is measured in weeks, not years, referring to Masefield v Alexander where an extension of five weeks was accepted.

The principle of finality

In this case, the court said that if the husband’s application to vary the deadline for payment of the lump sum was to succeed, it would significantly hinder the wife’s ability to put the parties’ dispute behind her (financially and emotionally). This would undermine the principle of finality.

The court held that “a delay of two years is not slight or modest and undermines the principle of finality”. This was irrespective of whether or not the wife was receiving periodical payments in the meantime or if the wife had any immediate need for the unpaid lump sum. The court’s primary concern was for the parties to achieve finality.

What is a “modest” extension of time?

Partner Voirrey Ward comments: “We know from Masefield v Alexander that five weeks was held as “modest”, and we know from this case that two years is not. However, the judge in this case did not provide any further clarification as to what constitutes a “modest” extension of time. Invariably, each case will turn on its facts but it is clear that any application for an extension of time for payment of an obligation under an order is unlikely to succeed it if jeopardises the principle of finality. It is, essentially, a pragmatic approach to enable parties to move on with their lives.”

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