Fatemeh Behzadi v Mohammed Reza Behzadi
| Jurisdiction | England & Wales |
| Judge | Lord Justice Wilson,Lord Justice Rimer,Lord Justice Rix,W |
| Judgment Date | 08 October 2008 |
| Neutral Citation | [2008] EWCA Civ 1070,[2008] EWCA Civ 399 |
| Docket Number | Case No: B4/2007/2843 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 October 2008 |
[2008] EWCA Civ 1070
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
FAMILY DIVISION
MR JUSTICE HEDLEY
LOWER COURT No: FD04D05320
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Rix
Lord Justice Wilson and
Lord Justice Rimer
Case No: B4/2007/2843
Mr Salim Mahmood (instructed by NB Kohi) appeared on behalf of the Appellant “wife”.
Mr Oliver Wise (instructed by Lancasters) appeared on behalf of the Respondent “husband”.
Hearing date: 17 July 2008
SECTION A: INTRODUCTION
With permission granted by myself at an earlier hearing, the “wife” (as I will describe her notwithstanding a decree absolute of divorce) appeals from orders for ancillary relief made against her in favour of the “husband” by Mr Justice Hedley in the High Court, Family Division, Principal Registry, on 30 November 2007. She contends that for various reasons the award was plainly excessive.
On the basis that the former matrimonial home in Northolt, which the wife continues to occupy and which I will describe as the “home”, should become her sole property beneficially as well as legally, the judge ordered her to transfer to the husband, subject to mortgage, her joint and equal interest in an investment property in Kensington and to pay him a lump sum of £130,000 in full and final settlement of all their mutual claims for ancillary relief. The judge also ordered her to pay a contribution of £40,000 towards his costs. The reasoning behind the award of part of the lump sum, namely £50,000, is clear in particular from the transcribed exchanges in court which followed the judge's judgment. But, other than in general terms of fairness, he did not spell out his reasons for having alighted upon the figure for the balance of it, namely £80,000; and although, with the aid of the balance sheets provided to him in the course of submissions by Mr Wise on behalf of the husband and by counsel then appearing on behalf of the wife, the judge will no doubt have compiled a balance sheet of each party's visible net assets and of the effect of his orders thereon, he did not incorporate it into his judgment, which he delivered orally on the fifth day of the hearing.
The parties are by ethnicity Iranian but have lived in England throughout their marriage, which was celebrated in 1975. The wife is now aged almost 67 and the husband is now aged 59. They have three adult children, who appear to continue to live with the wife in the home. In 2002 the parties began to live separately albeit under that same roof; in 2007, at around the time of the grant of the decree absolute, the husband vacated the home.
The judge, although not complimentary about the evidence of the husband, was particularly critical of that of the wife. He found that she had undertaken two dishonest manoeuvres, which I will describe in [5] and [7.2] below, in order to reduce her exposure to the husband's future claims against her for ancillary relief. He also found her guilty of litigation misconduct in the form of extensive non-compliance with interlocutory orders made in the course of the proceedings, by which she had both thwarted their efficient despatch and increased their cost. Furthermore he found that, in addition to four pieces of real property in Tehran which she had eventually disclosed, she might well have rights of ownership in relation to a further property there and probably also had cash resources there, albeit probably not particularly large in size. These findings, unchallengeable in this court, make the wife's appeal extremely difficult. It is sometimes even said that a finding of undisclosed resources against a party in proceedings for ancillary relief makes it in practice impossible for him to appeal to this court save when he can argue that, on the evidence, it was not open to the court to make the finding. Such is, of course, an exaggeration; but, by a party's failure of disclosure, which almost always renders the court unable to quantify the extent of his undisclosed resources, he certainly places substantial obstacles in the path of his appeal.
SECTION B: RESOURCES and NEEDS
The home is vested in the wife's sole name. Net of costs of sale at 3%, its value was taken as £450,000. In February 2002, five months after her issue of proceedings against the husband in Tehran, the wife, by her Iranian lawyer, entered into what the judge found to be a collusive arrangement with her brother, who resides there, in relation to the home. The brother had apparently sued her there for US$10,000; and their arrangement was that he should withdraw his claim in consideration of her transfer to the three children of the family of one half of the beneficial interest in the home in equal shares. The wife's former counsel wisely forebore to argue to the judge that she had thereby succeeded in alienating any part of the home to the children; and the judge readily found that its beneficial ownership lay with both parties in equal shares.
The Kensington property comprises four flats, is held in the joint names of the parties and was agreed to be owned in equal shares. The value placed upon it by the agreed valuer was £850,000 if sold as a single unit or £1,000,000 if sold as four separate flats. Although the wife's former counsel seems, like Mr Wise, to have commended the former figure to the judge, I see no reason to reject the median, namely £925,000, from which costs of sale at 3% and the mortgage outstanding on it, namely £83,000, fall to be deducted. So its net value is £814,000.
The parties face a CGT liability on their disposal of their interests in the Kensington property; indeed, under the judge's order for transfer to the husband, the wife would have to meet her liability in effect forthwith. On a disposal at a total gross value of £925,000, the CGT liability of each party would be £62,000.
The wife has, or was taken by the judge to have, three inherited properties in Tehran. Either she directly inherited them from her family or she bought them with money which she had inherited from it. Their total value, according to a jointly instructed valuer, is equivalent to £474,000; and the wife has not been permitted in this appeal to seek with fresh evidence to demonstrate that any of the three constituent valuations is excessive. The judge did not allow for costs of sale, as to which there was no evidence; but in this court Mr Wise rightly concedes that there must be costs of selling real property in Tehran and that, in the absence of evidence to the contrary, they should be taken at the percentage nowadays conventionally taken in respect of the sale of real property in England and Wales, namely 3%. That leaves £460,000.
In July 2003, i.e. following both her issue of proceedings against the husband in Tehran and her separation from him, the wife purported to transfer each of the three inherited properties to each of the three children. In relation to the properties, however, she reserved not only a power of attorney to act on behalf of the children but also – and at first sight more significantly – a “life interest” in the properties. The evidence given to the judge by the jointly instructed expert in Iranian law, apparently accepted by him, seems to have been that, in the particular circumstances including of the power of attorney, the effect of the “life interest”, unlike in English law, was that, until her death, the wife retained absolute ownership of the properties. One of the wife's original grounds of appeal, on which I had refused her permission to proceed, was that the expert – and thus the judge – had erred in that regard.
At the substantive hearing of the appeal Mr Mahmood on behalf of the wife made a further application to be permitted to proceed on that ground and to support it with fresh evidence from a second expert in Iranian law; Mr Mahmood accepted that, were it to admit the evidence, the court would be confronted with such controversy in relation to it that it would be likely to remit the husband's substantive application for re-hearing. We rejected his application on the basis that the time for the wife to attempt, with whatever degree of difficulty, to challenge the evidence of the jointly instructed expert was prior to the judge's judgment. We also observed however that, in addition to accepting that during her lifetime the wife in effect still owned the properties, the judge had in effect given an alternative reason for ascribing their value to her. For he found —inevitably – that the wife's purported transfer of the properties to the children was made without consideration at a time when she knew that the marriage was in serious difficulty; and he noted, apparently with approval, the husband's contention that she had effected it in order to obstruct his claims. Even when not asked under s.37 of the Matrimonial Causes Act 1973 to order the setting aside of a transfer by a respondent spouse by which she (or he) intended to obstruct an applicant's claims, the court can notionally reattribute to her such property as she has thus transferred, just as it can notionally reattribute to her funds which she has (recklessly) dissipated. Sometimes, however, a notional reattribution to a respondent of property transferred in such circumstances will be insufficient to serve the forensic purposes of the applicant, who will in that event need to go further and to apply, on notice to the transferee, for an order setting aside the transfer and thus actually restoring the property to the...
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