The court recently held in H v GH [2023] EWFC 235, that the court lacked jurisdiction to extend the time for payment by two years and that an application to extend undermined the principle of finality i.e. to bring financial matters to a close for both parties.
The Application
The application was made by the husband who had been ordered to pay a lump sum of £1.1 million by June 2023 to the respondent wife but had failed to do so. The lump sum was secured by a mortgage over the husband's flat and following non-payment, the wife was granted possession.
The wife cross-applied to strike out husband's application on two grounds; that the court lacked jurisdiction to extend the payment by two years, and that the application was an improper "collateral attack" on the Possession Order.
Consent Order
In relation to the first ground, the Judge confirmed that a lump sum could only be varied if it included a provision for pension rights or pension compensation rights (pursuant to s31(2)(dd) MCA 1973). In this instance, the lump sum did not. As such the court only had jurisdiction to extend the payment of the lump sum where the extension was 'modest' and 'not significant' (Masefield v Alexander [1995] 1 FLR 100). Therefore, it was held that an extension of two years was significant in the context where the lump sum would be paid 4.5 years after the Consent Order was approved. The purpose of a Consent Order is to provide finality for both parties. Such a delay here would undermine this purpose.
Possession Order
Turning to the second ground, the Judge held that the husband's purpose in making the application was not to accomplish an improper collateral attack on the Possession Order. Instead, the husband's purpose was to seek an extension in payment of the lump sum by arguing that the debt secured by the mortgage was not yet due.
When can an extension be given?
This decision emphasises that a court cannot significantly extend the time for payment of a lump sum where it does not include a provision for pension rights or pension compensation rights. The court only has jurisdiction to provide an extension where it is 'modest'.
Dealing with the enforcement, implementation or variation of a financial consent order can be difficult. It is important to take early legal advice. The family team at Stephens Scown would be happy to assist, so please do contact us for further information.
To read more about how the court deals with non-compliance, please click here.
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