The Thwaite Jurisdiction: The Power to Vary Orders Not Yet Fully Executed & Possible Limits on Varying a Lump Sum by Instalments

The primary purpose of this article is to draw attention to a very useful jurisdiction to vary financial remedy orders that is very rarely referred to, and used even less, but also, to refer cautiously to some obiter comments suggesting, against the general flow of judicial pronouncements, that it may provide only very limited remedies and that the jurisdiction to vary a lump sum by instalments may also be more limited than previously thought.

The ‘Thwaite jurisdiction’ title derives from Thwaite v Thwaite [1981] 2 FLR 280 (Court of Appeal (Ormrod and Dunn LJJ and Wood J)  and it has been approved and refined in several cases since then including:

L v L [2006] EWHC 956 (Fam) [2008] 1 FLR 26:  Mumby J, as he then was.

Bezeliansky v Bezelianskaya [2016] EWCA Civ 76: Court of Appeal: Sir Martin Moore-Bick, McFarlane and David Richards LJJ with McFarlane LJ as he then was giving the Judgment with which both of their Lordships agreed.

US v SR [2018] EWHC 3207 (Fam): Roberts J.

Kicinski v Pardi [2021] EWHC 499 (Fam), [2022] 1 FLR 474: Lieven J.

Summarising those authorities:

The Thwaite jurisdiction applies purely to orders that are still executory, meaning that they have yet to be carried out.  That is not to say that the Order has not yet been agreed or determined and sealed but, that having been finalised and made, its terms remain to be put into effect.  Potential examples would include an order for sale that has not taken place, a lump sum order that has not been paid, an indemnity that has not been honoured, in fact any order that has not yet been carried out including a Rose v Rose order.

The jurisdiction is available where, in respect of such an executory order, there has been a significant change of circumstances and, as a result of that it would be inequitable not to vary the order – that is of course similar to the Barder jurisdiction to set aside an executed order but where the change of circumstance must invalidate the basis or fundamental assumption on which the order was made, which is arguably a higher threshold, perhaps unsurprisingly as it applies to executed orders (see L v L and Bezeliansky, above).

The second part of the threshold, that it would be inequitable not to vary the order, is particularly likely to be met if the respondent has frustrated its execution: see Bezeliansky at [39] where McFarlane LJ also rejected the submission that all set aside applications were subject to the same threshold.

The variation “must be contained and, so far as possible should reflect the underlying intention of the original [order]”, US v SR (above) at [56].

In Bezeliansky, McFarlane LJ roundly rejected the husband’s argument that Thwaite “dealt solely with the court’s jurisdiction to opt to refuse to enforce a consent order and that it is not authority in relation to there being any jurisdiction to set the original order aside”,  noting that in Thwaite that because W had reneged on her promise H had refused to complete a transfer and that in its Judgment the Court of Appeal had said:

“although the judge was in error in considering that he had jurisdiction to vary the consent order under the liberty to apply, he had jurisdiction to hear the husband’s appeal against the consent order and set it aside on the basis of the fresh evidence that the wife had no intention to make a home for herself and the children in this country; that the judge also had jurisdiction to make the orders for ancillary relief, despite the wife’s refusal to consent to such a course, because her original application for ancillary relief was still before the court and awaiting adjudication.”

His Lordship then described the husband’s interpretation of Thwaite as “completely unsustainable.” [30-37]

The Contrary View:

Mostyn J, in SR v HR [2018] EWHC 606 (Fam), took a different approach.  His Lordship granted an appeal against a decision to vary an order under the Thwaite jurisdiction and disagreed with the lower court’s view that the jurisdiction allowed it to determine the matter afresh.  The lower court does not seem to have considered whether there had been a significant change of circumstances that made it inequitable not to vary, rather than just passage of time, but His Lordship went further in not only expressing the view that “any application under the principle in Thwaite should be approached extremely cautiously and conservatively” [13], but also in seemingly rejecting “the  notion that if the court, exercising its equitable jurisdiction, refuses to enforce an order it gains the power to make a completely new one” [12].

The trouble with SR v HR is, as Roberts J pointed out in US v SR, that whilst several cases were considered, strangely the much more on point authorities of Munby J’s decision in L v L and the Court of Appeal’s in Bezeliansky were not mentioned at all and they are surely authority for the court having exactly the jurisdiction that Mostyn J doubted.

In BT v CU [2022] 2 FLR 26, Mostyn J looked again at this issue but, the first point to make is that, this was a preliminary hearing in which His Lordship determined that the husband’s Barder application could not succeed because, on the facts of the case, the pandemic’s occurrence did not meet the first Barder test of the a new event invalidating the basis on which the order was made.  It follows that everything else was obiter with His Lordship stating expressly that it was not necessary to go further [40].  However,  His Lordship nonetheless took the opportunity to revisit his SR v HR approach, in this way:

(i)  saying that to the usual four tests in Barder must be added a fifth condition by which the applicant had to demonstrate that no alternative mainstream relief was available to him [7];

(ii) then, in considering that fifth condition, asking whether the Thwaite jurisdiction applied;

(iii) concluding that the Thwaite jurisdiction did not apply, because:

(iv) the Barder decision, providing a much stricter test than Thwaite, was also in respect of an executory order and must therefore be taken to have impliedly rejected the Thwaite jurisdiction as a legitimate source of relief [45-46];

(v) and, setting out again what he had said in SR v HR and suggesting that by saying “extremely cautiously and conservatively” His Lordship had been using “coded language expressing my doubt that the jurisdiction to rewrite (as opposed to mere refusal to enforce) existed at all” [51] so that whilst there is a power to extend time to comply with an executory order [52] replacing the order would repudiate Barder [55].

His Lordship then accepted that since SR v HR there had been four decisions which had rejected his doubts [56] but went on to say that he did not agree with these decisions as being in conflict with Barder [63] and S. 31 MCA.

The trouble with BT v CU is not only that it is all obiter but also, that the justification for considering the Thwaite jurisdiction at all was that there is a fifth Barder condition (a concept that is extremely difficult, if not impossible, to find any authority for) and, that the jurisdiction that His Lordship rejected has an august line of authority to support it.     It may be, as His Lordship mentioned that the Court of Appeal decision in Bezeliansky  is not technically binding because it was a decision refusing permission to appeal, but, as Lievin J said in Kicinski, it must carry the “greatest weight”  – it was after all a full and carefully reasoned judgment of an extremely strong Court of Appeal and it was following similarly weighty authorities.

The other interesting, if not controversial, aspect of BT v CU is in respect of variation of an order for a lump sum by instalments: His Lordship also examined this aspect under the heading of the fifth Barder condition and took the view, also obiter, that such orders can only be varied as to timing and instalments, i.e. recalibration of the payment schedule, but not as to overall quantum, rejecting the much held belief that S.31 MCA allowed for full variation of a lump sum by instalments (as it appears to say on its its face) and multiple authorities to that effect, including the Court of Appeal’s view in Hamilton v Hamilton [2014] 1 FLR 55 which His Lordship regarded as obiter on this point [68-98].

Given Mostyn J’s views on these important issues it would help enormously if they were soon the  subject of definitive determination but, for now, there can surely be little doubt that the Thwaite jurisdiction is as set out from  L v L  through Bezeliansky to Kicinski  and that  a lump sum by instalments order can be varied generally under S.31 as in Hamilton and as hitherto generally believed.