(Court of Appeal; Thorpe, Lawrence Collins and Goldring LJJ; 20 November 2008)
The husband exercised his right to buy his local authority accommodation only after he separated from the wife. On separation the wife and children were rehoused by local authority and eventually the wife acquired her own right to buy. At the ancillary relief hearing the judge ordered the husband to transfer to the wife an insurance policy with a surrender value of £14,000, to pay the wife £75,000 (in the belief that £63,000 was needed to enable the wife to buy 25% of the equity in her home, and to make nominal periodical payments for the children. Following the trial it emerged that there had been a general mistake of fact, namely that wife had right to buy 25% of the equity for a payment of £63,000. On appeal the judge declined to exercise his discretion afresh, on the basis that the lump sum had been determined after a long trial and by an experienced judge.
The father's appeal was allowed. The quantification of capital should have been reassessed when the mistake was recognised. Given that there had been a general misunderstanding of fact at the original hearing, the judge's reliance on the district judge's findings had been a fundamental error. There was no justification for the periodical payments order, and it would be struck out. The insurance policy should never have been transferred away from the husband, and the husband was entitled to revive it. The court reduced the lump sum to the wife from £75,000 to £40,000.