Varying Rose Orders – A New Three-Limb Test?

The question of varying a Rose order has had new light shed on it by Mr. Recorder Allen QC in G v C [2020] EWFC B35 (OJ). For those of you who are not family practitioners, there follows a brief fly-past of what constitutes a Rose order. Matrimonial finance specialists may wish to move straight to the next section which sets out the brief background to the case in question. I then set out the variations that were applied for and the judge’s reasoning in relation to each.

Rose Orders

The case of Rose v Rose [2002] EWCA Civ 208, which gave rise to the eponymous order, concerned an oral agreement reached by the parties following a Financial Dispute Resolution appointment (FDR). No order was drawn up as the court was closing and there was no time to do so. The judge approved the terms that were orally agreed. Before a written draft was presented to the court to be sealed, the husband resiled from the agreement.

It was held by the Court of Appeal that when the first instance judge had said he was happy to record the original terms, he was in effect saying that he was making an order in the agreed terms. The appeal judge noted that the practice of declaring such an order, then leaving the drafting to counsel is commonplace in many fields of litigation. Further, the whole point of the FDR would be compromised if the parties were free to change their minds. As a result, where there is insufficient time to agree wording of the final consent order, the terms should be brought to the attention of the judge (in writing if possible) and approved by the judge as a Rose order.

Background to the case G v C

For our purposes, there is no need to describe in detail the background, suffice to say the case involved a long marriage. The salient feature of the case was that amounts of money totalling some £7 million were gifted to the wife by her uncle and aunt (U&A) over a period of 17 years and was the subject of recent litigation by the U&A (in Italy) to recover the money gifted.

During the final hearing of the wife’s application for financial remedies, the parties conducted negotiations in parallel to the hearing, using the entirety of day 3 to do so. These negotiations involved both English and Italian lawyers. On the fourth day, the parties reached an agreement and counsel for both parties invited the judge to approve the terms of the agreement as a Rose order, which he did.

Months then passed with draft orders passing between the parties, running to some nine versions before the matter returned to the court (before the same judge), the terms remaining in dispute. Both parties made applications to vary the terms of the original Rose order.

Variations sought by the parties

The wife sought the following:
1. that the husband retain the funds held in the overseas accounts in a UK account until the U&A had both passed away
2. That the husband provide various indemnities
3. That the husband provide a lump sum to cover Italian litigation
4. That the husband maintain an address for service within the UK (to provide security for the indemnities sought) as the husband had left the UK leaving no significant assets here.

The husband sought:
1. An order for permission to disclose a transcript of the wife’s oral evidence at the final hearing to U&A so that it can be adduced by them in Italian proceedings
2. Various disclosure orders against the wife

Questions to be determined

The wife’s case was that the Rose order remained executory having not been perfected. The court therefore retained the power to make a new or varied order in light of new and significant evidence. Further, as a result of the failure of the husband to comply with the agreements which formed the basis of the order in the first place, it would be inequitable not to grant the wife relief and simply implement the order without fulfilling conditions on which the order was agreed.

The wife relied upon the jurisdiction established in Thwaite v Thwaite [1982] Fam 1, and further developed in subsequent cases, known as ‘the Thwaite jurisdiction’. Not wishing to introduce another cast of characters into this article, all we need to describe here in relation to Thwaite is that a husband and wife agreed a consent order for the transfer of the matrimonial home to the wife on the basis of her returning to England from Australia and living in it as a family home with the children. Instead, the wife returned briefly to the UK and took the children back to Australia. The husband declined to complete the transfer and applied to the court for a variation of the consent order. The wife countered with an application to enforce the order for the transfer of the husband’s interest in the matrimonial home.

The court of appeal held it was inequitable to enforce such an order, the judge’s jurisdiction to make a new order arising from the wife’s original application for ancillary relief still being before the court. The new order awarded the wife a lump sum of £1,000 rather than the husband’s share of the matrimonial home which, even in 1982, did not equal half of any sort of property.

Munby J (as he then was), giving judgement in L v L [2008] 1 FLR 13 gave a good summary of the matter at para 67:
“Merely because an order is still executory the court does not have …any general and unfettered power to adjust a final order — let alone a final consent order — merely because it thinks it just to do so. The essence of the jurisdiction is that it is just to do — it would be inequitable not to do so — because of or in the light of some significant change in the circumstances since the order was made.”

Questions to be determined

Back in our present case, the judge considered whether the Thwaite jurisdiction was engaged by asking himself these three questions:
a. Whether the Rose order remains executory;
b. Whether there has been a change in circumstances; and
c. If so, whether it would be inequitable to hold the wife to the terms of the Rose order.

Is the Rose order executory?

Some elements of the order had been complied with, but others had not. The judge therefore decided that the order was executory as a result of the operative terms remaining unimplemented.

Has there been a change of circumstances?

The wife’s case was that there has been a change of circumstances because the agreements had not been implemented in full. The judge did not agree. The details of the Rose order were such that, “It must therefore have been obvious to both parties that there remained a degree of work to be done…” and that as a result of the nature of the litigation thus far, that work could prove contentious. It would also have been apparent to the parties that further costs would be incurred, also something that did not represent a change in circumstances. With all that in mind, the judge did not consider that the Thwaite jurisdiction was engaged.

Would it be inequitable to hold the wife to the terms of the Rose order?

Having decided there was no change of circumstances, the judge was not required to explore this (dare I say it) limb of the test, however he posed the question on the hypothetical basis of being wrong about the change of circumstances. In short, given that there was no fact finding he was unable to find it inequitable to hold the wife to the terms of the Rose order.

Of interest in this section of the judgement is that part of the husband’s argument was that the wife could not argue that it would be unconscionable for her to be held to the terms as they were originally agreed by her. The judge pointed out that this must be wrong as a general statement of principle because in Thwaite, the order had been made by consent, yet was successfully challenged.

Conclusion

Has Mr. Recorder Allen QC given us a three-limb test to establish whether variation of a Rose order might be appropriate? Barristers do love a three-limb test. I believe he (almost) has:

1. Is the order (a) executory or has it been (b) performed?
2. If (a), has there been a change of circumstances?
3. Would it be inequitable to hold the party in question to the original order?

Of course there is a caveat, hence suggesting he almost has. This is not a Court of Appeal case, it remains therefore, a case of great interest and, I suggest a very good guide until we are told otherwise.

This article is but a brief encounter with Thwaite jurisdiction, Rose orders and the process of varying the same. In his judgement in G v C, Mr. Recorder Allen QC, gives a much fuller and far more eloquent discourse on the nature of consent orders, the jurisdiction of the court in relation to them and the case law that pertains. I thoroughly recommend reading the judgement (which can be found at https://www.bailii.org/ew/cases/EWFC/OJ/2020/B35.html) if the area is of interest.

Matrimonial finance is a specialist area of law. If you require advice or assistance, do not hesitate to contact clerks@becket-chambers.co.uk.