C H v A C (Formerly E) and Others

The applicant (former husband) sought to rescind parts of a divorce settlement agreement made an order of court on 18 July 2023, which granted the first respondent (former wife) sole parental responsibilities and rights over their two minor children and recorded his consent to their adoption by the third respondent (her new husband). The applicant had not seen the children since June 2021. He claimed he signed the agreement while not in a sound mental state due to depression, financial duress, and threats of incarceration for contempt of court arising from maintenance arrears. The respondents opposed the application, and the children were independently represented. Shortly before the hearing, the applicant requested a referral to oral evidence/trial based on a late affidavit filed by the children's attorney.

• Whether the applicant established that he lacked the mental capacity to contract at the time he signed the settlement agreement on 13 July 2023.
• Whether the applicant discharged the onus of proving the agreement should be set aside on the grounds of lack of sound mind.
• Whether the applicant's informal request for referral to oral evidence or trial should be granted.
• Whether a punitive costs order should be granted against the applicant.

1. The application is dismissed. 2. The applicant shall pay the costs of the first and third respondents on the scale as between attorney and client, including reserved costs. 3. The applicant shall pay the children's costs, including the costs of two counsel (senior counsel on Scale C, junior on Scale A).

A party seeking to set aside a contract on the ground of lack of mental capacity must prove that at the time of contracting they were incapable of understanding and appreciating the transaction. An expert opinion on a party's mental state must be properly presented in an affidavit and based on contemporaneous observation. A party cannot rescind only selected portions of a settlement agreement that has been made an order of court; they must accept rescission of the entire agreement.

The court noted the applicant's conduct showed a 'startling lack of empathy' for his children by insisting they tell him their wishes directly, despite evidence of their fear and consistent refusal of contact. The court commented that the applicant's legal representatives, if genuinely concerned about his mental state, could have applied for the appointment of a curator ad litem, which they did not do.

The case illustrates the high onus on a party alleging incapacity to contract, especially in divorce settlements involving children's interests. It confirms that a party cannot selectively rescind only the disadvantageous parts of a settlement agreement while retaining benefits. It also underscores the court's approach to unrepresented litigants and the limits of indulging procedural requests when no proper case is made out.