Kianoosh Azarmi-Movafagh v Sorour Bassiri-Dezfouli
| Jurisdiction | England & Wales |
| Judge | Lord Justice Moylan,Lady Justice King,Lord Justice Newey |
| Judgment Date | 30 July 2021 |
| Neutral Citation | [2021] EWCA Civ 1184 |
| Docket Number | Case No: B6/2020/1856 |
| Court | Court of Appeal (Civil Division) |
[2021] EWCA Civ 1184
Lady Justice King
Lord Justice Moylan
and
Lord Justice Newey
Case No: B6/2020/1856
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT (FAMILY DIVISION)
Mrs Justice Judd
[2020] EWHC 1843 (Fam)
Royal Courts of Justice
Strand, London, WC2A 2LL
Lucy Owens and Philip Tait (instructed by Dawson Cornwell Solicitors) for the Appellant
Sarah Phipps (instructed by Mansouri and Sons) for the Respondent
Hearing dates: 18 May 2021
Approved Judgment
This is a second appeal in a straightforward financial remedy case ‘marked’ as HHJ Robinson put it at the trial, by ‘extreme positions and a degree of bitterness’. The judge if anything understated the position; the degree of acrimony on both sides has been such that the parties embarked on a course of litigation which became an exercise in self-destruction. As a consequence, the costs have become so disproportionate relative to the assets that it is now hard to achieve an outcome in this uncomplicated needs case which will not leave each of the parties profoundly discontented.
In summary, the judge at first instance made an order providing Kianoosh Azarmi-Movafagh (‘the husband’) with funds sufficient to buy a modest property and also to pay most of his costs. Sorour Bassiri-Dezfouli (‘the wife’) appealed on the basis that the husband should not have been awarded anything at all and should bear his own costs. The appeal was heard by Judd J who allowed the appeal and substituted the direct payment referable to the husband's costs which had been ordered by HHJ Robinson, with a charge for the same sum to be secured on the property he would in due course purchase. The husband now appeals against the imposition of the charge. The wife no longer opposes that part of the lump sum intended to be used to buy a property, but submits that the husband should have no contribution towards his costs.
The depressing facts of this case have not only brought into sharp focus the issue in this appeal, namely the appropriate treatment of any outstanding costs incurred by the recipient of a needs award, but also serves as a reminder of limits of the role of the Appeal Court, particularly on a second appeal.
Background
The husband and wife are both in their 50s. There is one child T who is 8 years old. The parties contracted an Islamic marriage which was then followed in March 2007 by a civil marriage. The marriage ended in December 2017 following two incidents of violence on the husband's part. The husband was subsequently acquitted in criminal proceedings, but a finding was made on the balance of probabilities at the conclusion of a fact-finding hearing in Children Act proceedings, that he had been violent to the wife.
The wife is a barrister practising in a modest way. A substantial proportion of her income comes from the rental income she receives from a number of properties she owned prior to the marriage. The wife also owns the former matrimonial home which was valued at £727,000 with a mortgage of £370,000. The total value of the assets (including the matrimonial home) was £2,347,000 (net of capital gains tax) and £1,781,389 (after deduction of the wife's debts of £300,000 and the husband's debts of £257,000). The wife was the breadwinner throughout the marriage.
The husband has no assets and currently lives in a rented one bedroom flat and is in receipt of universal credit. During the course of the marriage the husband had a significant caring role for T.
Surprising though it may seem, the trial took three full days of court time before the Circuit Judge. The judge found the husband's contribution to the marriage to be significantly more than that alleged by the wife who, the judge said, refused to ‘give the husband credit for anything’. His contribution was however significantly less than that claimed by the husband, who the judge found was ‘prepared to exaggerate freely and make grandiose claims that he could not substantiate’.
The judge concluded that this was a ‘needs’ case and that the husband needed £400,000 to buy himself a property which would be suitable for T to come and stay. The judge ordered payment of a further £25,000 to cover costs of purchase and the purchase of a small car. There is now no appeal against this part of the judge's judgment. This court therefore approaches the appeal on the basis that the husband's needs as assessed under Matrimonial Causes Act 1973 s25(2)(b), (‘MCA’) were for a property and associated costs of purchase which needs could be met by payment of a lump sum of £425,000.
The judge then turned to the issue of the husband's debts which are further analysed below. The judge said that he recognised the validity of the argument of Ms Owens (who represented the husband and represents him again today pro bono) that if there were no provision for the husband's debts, his needs would not be met. The judge went on to award the husband the sum of £200,000 towards his costs making a total lump sum of £625,000.
The judge unsurprisingly described the open position taken by the wife at trial (and again at the first appeal) that the husband should leave the marriage with nothing, as ‘unrealistic’ and concluded by saying that he did not believe the husband should be expected to rent a property and that:
“I recognise that the sum that I award, complicated as it is by the treatment of the debts, is a low proportion, but I consider it effective to deal with his needs and recognise the balance of the factors under Section 25.”
Costs and Debts
As of the 7 August 2019 when the judge made his order, the husband's costs were £186,864 made up as follows: £177,000 + £8,000 for the financial remedy claim, £48,864 for the parallel Children Act proceedings and £13,000 in relation to criminal proceedings. The husband's other debts when added to the costs of the litigation led to a total indebtedness of £257,237.
To elaborate a little; the financial remedy proceedings were substantially funded by way of a litigation loan of £120,000. In addition, the husband's sister in Australia generously raised £122,560 which was secured by a mortgage upon her home. The money was used substantially towards costs but included an element towards living expenses.
So far as the Children Act proceedings were concerned, the husband chose to instruct leading counsel. As already noted, a finding was made that the husband had been violent to the wife on two occasions. This was not however one of those rare cases where the court made an order for costs against the husband in accordance with the principles in Re T (Costs: Care Proceedings: Serious Allegations not Proved) [2013] 1 FLR 133 SC ( re T). Whilst the criminal proceedings led to an acquittal, the husband who had been entitled to legal aid, had chosen to instruct counsel on a private fee-paying basis.
In relation to the financial remedy proceedings, as already indicated the wife maintained her position throughout that the husband should receive no award whatsoever. Further, at what would appear to have been at her instigation, three family members became interveners in the proceedings for a period of time before they withdrew. The wife paid the costs incurred by all involved in relation to what was a pointless and ill-judged foray. The judge in his judgment made no criticism of the amount of costs incurred by the husband in the financial remedy proceedings and noted that the husband's costs were greater than those of the wife, but observed that there was ‘some reason for that.’
Ms Owens told the court that her stated position in her closing submissions at trial had been that the husband's primary position was that he sought a lump sum sufficient to pay his costs, whilst leaving him with a ring fenced sum with which to buy a house. If the court did not make an order on that basis, Ms Owens told the court at trial, she would be making an application on behalf of the husband for an order for costs on the basis that the wife had been guilty of litigation misconduct.
The judge did not address the issue of whether it would have been appropriate to make an order for costs on the facts of the case, rather he dealt with the matter briefly in his ex tempore judgment given at 5.00pm on the final day of the trial as follows:
“31,….[I] do recognise Miss Owen's argument that if I do not provide for that [his debts] I am not dealing with his needs. Although his costs of these proceedings are greater than hers, there is some reason for that, and I am not going to deal with that in a mathematical way.
32. But I do think that it would be wrong to say that the costs of the criminal proceedings and perhaps some of the costs of the children proceedings should not be his responsibility from his own resources. I will award the sum of £200,000 towards his costs which will go a long way to dealing with them, will certainly allow him to pay off his litigation loan, and will go a long way to pay off his sister. He then has to decide on the balance of what he does with his money between his housing and his payment of the soft debts. That is a matter for him and his sister…”
As always in any financial remedy case it is necessary to step back and look at the overall award in order to see whether, first consideration having been given to the welfare of T, the award represents so far as can be achieved, a fair outcome. This was an 11-year marriage with one young child. All the assets are non-matrimonial. The order...
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