Pension Sharing Order Set Aside Following Change In Circumstances

The Family Court have recently set aside a Pension Sharing Order in the case of SY v Personal Representatives of the Estate of DY (Deceased) [2023] EWFC 280 (B).

A Pension Sharing Order is one of many remedies available in a financial settlement following divorce, and the court has the power to order a party to split their pension with their former spouse. In these circumstances, they will be entitled to take a share of their spouse’s pension and may be able to join their pension scheme, or move it into a pension of their own.

In this case, the court had already made a Financial Remedy Order following the separation and divorce of a Husband and Wife.? One aspect of that financial arrangement was for there to be a Pension Sharing Order of 40.8% of the Husband’s NHS pensions, to be shared with the Wife.

However, approximately six months after the date of the Financial Remedy Order, the Wife died in unexpected circumstances.? The Husband sought to appeal the Financial Remedy Order, despite the timeframe for an appeal having passed on the basis that a Barder Event had occurred.

?

Barder Event

A Barder Event originates from the case of Barder v Barder in 1987, and is defined as any new event which occurs, which would invalidate the main or fundamental basis on which a Financial Remedy Order was made, and ultimately provides for a party to then challenge that Order.

The Husband’s appeal in SY v Personal Representatives of the Estate of DY (Deceased) was that a Pension Sharing Order had been made to provide an income for the Wife in retirement.? However, due to her death, she would therefore no longer require the benefit of pension income later in life.

The personal representatives of the Wife’s estate agreed for the appeal to be made out of time, and that the Pension Sharing Order should be set aside, as it had not yet been implemented, and that this was likely to be considered as a Barder Event.

However, the personal representatives of the Wife argued that the beneficiaries of her estate would miss out on approximately ￡50,000.00 as a result, and therefore the Husband should make a further lump sum to the Wife’s estate in this amount.

The Husband argued that a lump sum should not be ordered as a condition of setting aside the Pension Sharing Order, as the purpose of such provision was not about sharing resources with the Wife’s estate, but to provide her with income in retirement, which she would no longer require following her death.

However, having considered the Judgement for the original order, the court held that the Pension Sharing Order was not made solely to meet the Wife’s income needs, and there was an element of “sharing”.? As such, the Judge hearing the appeal determined that it would be unjust to the estate of the Wife, and ultimately the parties’ three children who would benefit from the Wife’s estate, if the court did not make the Lump Sum Order to compensate them for not receiving the benefit of the Pension Sharing Order.

The court therefore ordered that the lump sum payment be made but allowed the Husband six months from the sale of the former matrimonial home to provide security for the lump sum, with the payment being deferred until the youngest child attained the age of 21 or ceased full time education.

While an important principle in financial remedy cases is to achieve finality of financial claims, this case is important as a recent example of a rare case where the court may set aside a previous Financial Remedy Order where there has been a ‘Barder event’, but the court nonetheless considered the fairness of setting aside such order and offset the Pension Sharing amount with a lump sum to the Wife’s estate.

Whilst circumstances of this nature may be rare, it is important that parties to a Financial Remedy Order receive independent legal advice, particularly where they believe there may be grounds for an appeal.

?

If you or anyone you know requires advice in respect of a Financial Remedy Order or Family Law, please contact our Family Team on 01206 835320, or by emailing [email protected].

?