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Goodyear (H) v Executors of the Estate of Heather Goodyear (deceased) (W) [2022]
In accordance with first tier judges publishing some of their case decisions, this decision by HHJ Farquhar is a useful guide in a lower asset case (although higher than many cases we deal with.
The parties married in 1979 and separated in 2017.
A FR consent order in January 2021 provided for an approximate equal division of capital and a pension sharing order based on equality of income. H and W had unequal pensions but H’s was the greater and subject to the PSO of 51% to W.
In August 2021 W died, and H applied to set aside the PSO, opposed by the executors.
The fundamental issue was whether or not the death of HG had invalidated the basis or fundamental assumption upon which the order had been made as was required following the line of authorities following Barder v Caluori[1987] 2 All ER 440 (Barder).
H submitted that a pension was intended as a form of income and, upon the death of W, that income would not be required and could not be utilised. It was further submitted that, if at the date of entering into the consent order, it had been known that W would die within six months the pension sharing order would not have been made.
W argued that, a pension was not to be considered in any different light to other assets and W was entitled to the pension sharing order under the sharing principle following a lengthy marriage.
The judge considered regulation 6 of the Pension Sharing (Implementation and Discharge of Liability) Regulations 2000.
The judge found that the case came within the Barder principles, and that he could make a decision without a rehearing, (following Kingdon v Kingdon [2010] EWCA Civ 1251, and Neil v Neil [2019] EWHC 3330.
At para 44 the judge said:-
‘The starting point would be to assess the basis upon which the order was made. This was a Consent Order and consequently there is no judgment setting out the rationale behind the order that was made.’
At para 49 he stated:-
The majority of the points raised in relation to the pension share were concerning income and not that an equal division had been 'earned' pursuant to the sharing principle, although this was alluded to in the final sentence (of a letter).
NB many pension cases that I deal with are based on equality of income in retirement and it is easy to focus on that rather than, say the principle of sharing behind equality, although the two probably amount to the same thing
At para 51 the judge said:-
It follows that I am satisfied that the thrust behind the pension share was in order to ensure that the parties had sufficient income during their retirement. If it had been known that Mrs Goodyear would not live more than 6 months after the order was entered into then the same pension share would not have been agreed. It is the intention of the parties at the time that the order was approved that is important, rather than any intention that was formulated thereafter. It appears that Mrs Goodyear latterly formed the intention to ensure that she was able to pass on the benefits of her pension to her beneficiaries, but this intention is only evidenced after she had become aware of her terminal diagnosis and not at the time that the original order was agreed. As such, it is not relevant in considering the fundamental basis of the order when it was entered into.
In deciding the outcome the judge said at para 64:-
The correct level of pension share to order is one of 25% of Mr Goodyear's Shell pension. This will ensure that he receives some 75% of the pension income that had been earned throughout the marriage but would also provide a significant pension credit for Mrs Goodyear's estate which will be implemented by the Pension Trustees. This will appropriately reflect the 'earned' share whilst providing a 'discount' for the many years over which income will not be required for Mrs Goodyear. The order is one that balances the competing arguments as to the nature of the pension asset in a way that fairly meets the income needs of Mr Goodyear and a fair sum for the estate of Mrs Goodyear.
Regarding costs, he invited written submission within 7 days if either party was to pursue such an order.
