Matrimonial Case – Critchell vs Critchell

The original settlement

When Mr and Mrs Critchell separated in 2010, Mr Critchell moved out of the family home, leaving his wife to live there with their two children. He then bought a new home for himself, using £85,000 borrowed from his father and a mortgage of £63,000.

According to their financial settlement (set out in a consent order), ownership of their family home was transferred to Mrs Critchell, who also took over responsibility for the mortgage. Mr Critchell was to have a charge over the house, like a second mortgage, for 45% of its net value. In other words, he was the nominal owner of 45% of the property, and he would receive that 45% when the first of the following events occurred:

1. their youngest child turned 18 or completed full-time secondary education.
2. Mrs Critchell died
3. Mrs Critchell re-married or co-habited with a partner for a significant period of time
4. the sale of the property.

The order also instructed Mr Critchell to make nominal maintenance payments to Mrs Critchell.

The original settlement is appealed.

A month after the court approved the consent order, Mr Critchell’s father died and he inherited £180,000. This meant that he could pay off the mortgage on his new home and no longer had to repay the £85,000 loan to his father.

Mrs Critchell applied to the court to appeal against the consent order. She argued that the death of Mr Critchell’s father had moved the goalposts. Mr Critchell’s circumstance were now quite different, so her case qualified for reopening according to the Barder vs Barder precedent.

The Court’s decision

The court agreed that her case met all the principles set out in the Barder case and referred it to the High Court.

The High Court agreed with Mrs Critchell and removed Mr Critchell’s charge over the former matrimonial home. Mr Critchell appealed to the Court of Appeal, but they upheld the High Court’s decision, and he lost his 45% charge over the house.

Critchell v Critchell: understanding the Court’s decision.

The changes made to the consent order meant that Mr Critchell received nothing from the marital assets built up by the couple during their marriage, which at first sight might seem unexpected.

The original consent order was designed to enable Mrs Critchell and her children to continue living in the family home and keep 55% of the value of the house. Mr Critchell would receive nothing immediately, but in the future would receive payment for his share of the house, which would enable him to pay off most of the loan to his father. After that, both he and his wife would have similar levels of value in their homes.

The death of Mr Critchell’s father changed the situation. Mr Critchell no longer needed to repay the loan to his father and had also inherited enough to pay off the mortgage on his new house. The courts therefore upheld that Mr Critchell no longer needed the 45% charge over the former matrimonial home and changed the settlement terms to remove it.

When a court works out a financial settlement, it starts from the assumption that the marital assets should be shared equally, unless certain factors come into play. The most important of these is “needs”. This means that the court must create a settlement that first ensures that the needs of minor children are met and then that the needs of both the husband and the wife are provided for.

The courts upheld Mrs Critchell’s application because they believed it was the best way to meet the needs of her children, and then hers and Mr Critchell’s.

Conclusion

It is very rare for a divorce financial settlement to be reopened and changed. However, the Critchell case shows that unexpected and significant changes, such as a sudden substantial inheritance, can occur in the weeks and months following a financial settlement order. If they do, an application may be made to the court to change the existing settlement terms.

Next Steps

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