Family Law Hub

Musa v Karim [2012] EWCA Civ 1332

  • In a tweet: Confirms two routes still available to make a set aside application

    Summary: The wife ("W") and the husband ("H") had been embroiled in "extremely unsatisfactory" financial proceedings. H was a litigant in person and had quite clearly failed to make full and frank disclosure of his own financial circumstances. Indeed, as an indicator as to quite how unsatisfactory the case had become, the original three day final hearing turned into a three day directions hearing so as to bring the case into some sort of order.

    At the final hearing, the judge was extremely critical of both W and H and described the hearing as "extraordinary". In brief, each argued that the other was a liar and had fabricated documents to support their case. Ultimately, the judge preferred W's evidence wherever it conflicted with H's evidence.

    Part of W's case had been that, although she had inherited six overseas properties on the death of her wealthy father, she had entered into a family arrangement whereby, in lieu of her interests in these properties, she received a lump sum of $125,000. She gave evidence that she had spent this money before she and H had married. She also produced documentary evidence showing she had no interest in the properties she had inherited.

    In relation to three other properties, W had argued that two of them were not beneficially hers but her mother's and that the third had been acquired by her on behalf of her brother who in due course would hold it on behalf of cousins.

    The judge accepted W's evidence on all these points and made an order that the assets as described and valued by W should be divided equally between the parties and that a balancing lump sum be paid to W following the sale of the former family home. H was also condemned in costs.

    H appealed on a number of grounds:

    • the judge's conclusion had been fundamentally vitiated by W's material non-disclosure both in relation to her inheritance and her interest in the three other properties;
    • the judge had erred in principle in refusing to admit relevant evidence that H was proffering as a litigant in person;
    • the judge had been fundamentally wrong in awarding a balancing lump sum to W of £219,500 in order to bring her to equality;
    • the judge had been wrong to give W the absolute right to sell the former family home at whatever sum she chose to achieve as part and parcel of the overall settlement; and
    • H attacked the judge's costs order.

    As can be seen, H's appeal was a mix of an application to set aside an order together with an attack on the discretionary judgment itself.

    W took a procedural point that the Court of Appeal should not be dealing with applications to set aside or vary on the grounds of material non-disclosure (Judge v Judge [2008] EWCA Civ 1458 and therefore that H had improperly made an application to the Court of Appeal.

    Held: H's appeal was allowed in part.

    Looking at the set aside application first, Lord Justice Thorpe agreed with H that the fresh material he had obtained (property documents which conflicted with W's version of events) was highly significant and belied W's case that she had divested herself of four of the properties she had inherited pre-marriage. Rather, they demonstrated her dealing with the properties and showed that she had divested herself of the properties at a time when the financial proceedings were at a critical stage. Further, valuations obtained by H suggested that the considerations received by W for these property transfers were at a significant under value.

    In respect of the other two properties which W had inherited, Thorpe LJ held that H's evidence was "not as stirring" but it did cast doubt on the validity of W's disclosure.

    Turning then to the two properties which W had argued were not beneficially hers but her mother's, Thorpe LJ noted that there were some unexplained questions which required further investigation.

    Rejecting W's procedural submissions and referring to Rayden and Jackson, Thorpe LJ stated that the current position was that it was perfectly possible for an applicant who sought to establish a case of non-disclosure to go either by way of appeal to the Court of Appeal or to apply to the first instance court; which route was adopted would depend upon the facts of each case. Here, H's decision to bring a complaint of material non-disclosure was found to have been properly brought.

    Concluding that W's answer to H's fresh evidence was so far "feeble", he remitted the case back to the Principal Registry for a full investigation to be conducted based on all the available evidence.

    On the "appeal" grounds themselves, Thorpe LJ held that no permission to appeal should be granted on the basis that the judge had been fundamentally wrong to award the lump sum he did as there was no realistic prospect of H being successfully on that point. However, insofar as the judge's ruling on W's freedom not only to market but also to retain an entitlement to £219,000 whatever sum she traded the house at, Thorpe LJ held that the point was plainly arguable that H was entitled to be safeguarded against W either deliberately or unwisely contracting a sale of the property at an under-value. In relation to that ground, permission to appeal was granted but any listing of an appeal was adjourned pending the outcome of the remission.

Case note, published: 14/11/2012

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  • Judgment from the President concerning whether it was open for a wife to apply to set aside an order for reasons of non-disclosure or whether she was required to appeal as per FPR PD30A. He concludes that the relevant part of PD30A is ultra vires so the wife can proceed without court permission. Judgment, 17/04/2015, free

Published: 14/11/2012

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