Karia v Karia
| Jurisdiction | England & Wales |
| Judge | Lord Justice McFarlane |
| Judgment Date | 03 December 2014 |
| Neutral Citation | [2014] EWCA Civ 1746 |
| Docket Number | B6/2014/2359 |
| Court | Court of Appeal (Civil Division) |
| Date | 03 December 2014 |
[2014] EWCA Civ 1746
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM PRINCIPAL REGISTRY OF THE FAMILY DIVISION
(MRS JUSTICE PARKER)
Royal Courts of Justice
Strand
London, WC2A 2LL
Lord Justice McFarlane
B6/2014/2359
B6/2014/2360
Mr Michael Horton (instructed by) appeared on behalf of the Applicant
The Respondent did not appear
This is an application for permission to appeal brought following the conclusion of hotly contested financial provision proceedings arising out of a marriage. The proceedings were heard by Parker J over the course of four or five days in July 2013 and there were subsequent hearings in the spring and early summer of 2014 resulting in a very full reserved judgment given on 20 June, and a final order which itself runs for some nine or ten pages perfected as at 30 June 2014.
The background circumstances of the marriage are not really relevant to the issues that are before me in the appeal, which largely relate to technical but important structural aspects of the judge's order, and in particular her jurisdiction to do what she did in relation to a transaction in which the husband had sought to transfer his one-third share in a property to the other two share-owners, being his two sisters. The proceedings related to a marriage that had been celebrated in November 2000 with the divorce proceedings leading to decree nisi in October 2011. There were two children of the family, both of the parties are of Gurati background and Hindu faith.
The focus of the judge's determination was upon the husband's family and in particular the financial arrangements between the various family members and in particular, within that, the relationship financially between the husband and his two (or at least two of) his sisters. The two sisters UK and MK were joined as respondents in the proceedings before the judge.
The scope of the judicial exercise undertaken by Parker J is not to be underestimated. She describes the case as involving:
"An enormous amount of detail, detail which cannot, unfortunately, be put entirely on one side in favour of the broad-brush approach".
The detail involved a number of transactions, at least two trusts that were related to the family and loans, cross loans and repayments of loans as between various family members, the three who were before the court: the husband and his two sisters, and also their father. The wife's case was simply that the moving of money around in the period leading up to the institution of divorce proceedings was a sham and designed by the husband's family acting as a team to thwart any claim she might have for financial provision.
The husband's case, very firmly supported by his two sisters, was to the contrary: that these were ordinary financial transactions between family members, each one explicable in its own terms, each one actually undertaken with money moving from one side or the other and that, although coincidentally as a matter of time, they existed alongside the worsening relationship between husband and wife, they were not relevant, and insofar as they left the husband without a share in the property, that was the way matters were and that the transactions should not be set aside.
The judge, having heard evidence from all of the key players, formed a very adverse view of the husband and the other relevant family members. She agreed with the wife that the various transactions with which she was concerned were indeed a sham and she therefore moved to make orders setting transactions aside, in particular that of the transfer by the husband of his one-third share in the former matrimonial home.
The husband's case was, and this was I think accepted on the facts, that he had sold his share to his two sisters in July 2009 and that they had each paid him half of the total remuneration he received of £69,000. The judge's order set aside that transaction, but did not provide for the repayment by the husband to the sisters of any part of that £69,000. The judge ordered the sale of the property. Part of the husband's one-third share had to come to the wife, but the judge ordered that the wife should receive a total lump sum of £110,000.
Finally, the judge ordered the husband and his two sisters jointly and severally to pay 90 per cent of the wife's costs of the financial remedies application set on a basis of solicitor and client private rates rather than legal aid rates on an indemnity basis, and counsel, Mr Horton, who appears before me today representing all three of the proposed appellants, he having appeared for the husband alone before the judge, tells me (and I accept) that that costs figure represents the sum of around £126,000.
The husband and his two sisters seek permission to appeal and in reality the focus of their application is two-fold. First of all, they seek to challenge the judge's order setting aside the transfer of the husband's one-third share, but not requiring the husband to transfer back or account for the £69,000. Secondly, they seek permission to appeal against the costs order. Thirdly, and not part currently of either of the proposed appeals, is a fresh issue which Mr Horton has raised before me today relating to the availability of fresh evidence which might seek to cast doubt upon the overall credibility of the wife, that fresh evidence arising from proceedings in relation to the children. I will turn to that once I have dealt with the substantive applications as they arise.
The applications for permission to appeal were considered on paper by Floyd LJ on 15 October 2014 and he refused to grant permission to appeal to either of the applicants and he therefore also refused a stay. I have heard the matter anew and I have been particularly assisted by Mr Horton both on paper in his skeleton arguments, but also orally today. His arguments and his submissions are extremely lucid and clear and if I decide against the three applicants, it is not for lack of understanding of the points that are made or understanding the force with which they are put. Equally, I readily understand just how important this decision is for the husband on the one hand and for the two ladies on the other hand. These are not insignificant amounts of money to them, but also there is a feeling of justice and fairness and they, as I apprehend, strongly resent the judge's conclusions against them and their impact.
In the husband's case he goes further than that. He is insolvent, it seems, and Mr Horton submits that the overall result of the judge's process is to give the wife a lump sum which represents on Mr Horton's figures 129 per cent, that is more than the whole of the net assets and once you add in the further sum of costs, that gives the wife something in the order of 148 per cent of the net assets. His submission therefore is that the overall picture indicates that "something has gone badly wrong".
Turning to the judge's decision on set aside, Mr Horton's submissions are clear and plain and they are unremarkable and easy to accept in that he describes the ordinary position where there has been a disposition of property and someone has transferred an interest in something and received money for it. The ordinary result in financial remedy proceedings (if that disposition is set aside) is for the third party and...
To continue reading
Request your trial