George v George

An ancillary relief order requires reconsideration where a later judgment establishes a substantial liability contrary to a fundamental assumption underlying the original financial assessment. An inference that a spouse possesses undisclosed and unquantified assets does not necessarily answer a subsequently established, quantified liability.

The fresh section 25 review may be conducted de novo and may extend beyond the immediate asset affected if the reviewing judge considers that appropriate. Where related civil proceedings may determine facts material to ancillary relief, the family court should avoid forecasting their outcome. It should instead consider adjournment, allocation to the same judge, or coordinated preparation and determination.

Following the dissolution of their marriage, the parties pursued ancillary relief proceedings concerning principally the proceeds of sale of their former matrimonial home. District Judge Cotterill treated an alleged debt to a Swiss trust as unreal and found that the husband possessed undisclosed assets. He consequently awarded the wife three-quarters of the available proceeds and the husband one-quarter.

Black J subsequently gave judgment for the Swiss claimant for approximately £500,000. That result contradicted a fundamental assumption in the district judge’s assessment. His Honour Judge Hamilton nevertheless dismissed the husband’s appeal because the district judge had found that other, undisclosed assets were available to him.

The husband appealed. The central issue was whether the ancillary relief order should be altered or reconsidered in light of the subsequently established debt.

1. Appeal allowed unanimously. Lord Justice Thorpe, with whom Lady Justice Arden agreed, held that the ancillary relief order required judicial reconsideration. Black J’s judgment had falsified a fundamental assumption underlying the district judge’s assessment. The existence of inferred, submerged and unquantified assets stood in a different category from a quantified and enforceable liability. The circuit judge’s reasoning therefore did not provide a sufficient basis for refusing any review.

2. Lady Justice Arden further reasoned that the earlier assessment failed to account for the husband’s established liability of approximately £400,000. Although the district judge had recognised that the expenditure on the matrimonial home came from the husband, his approach assumed that the husband did not owe the corresponding debt. The husband had therefore failed to receive proper credit for improvements for which he was financially liable.

3. The ancillary relief proceedings were remitted to the Family Division and reserved to Black J. She was to reconsider the disposition of the proceeds of sale in light of those findings in the civil proceedings which conflicted with the district judge’s findings. Lady Justice Arden clarified that the required section 25 review was de novo. Black J could consider matters beyond the property proceeds if she regarded that course as appropriate.

4. Lord Justice Thorpe stated that a judge determining ancillary relief should not anticipate or forecast the result of related proceedings where the risk of a false assumption can be removed. Appropriate alternatives include adjourning the ancillary relief proceedings, allocating both matters to the same judge, or preparing and determining them in tandem. Coordinated practice between the family and civil justice systems could avoid the expense and difficulty illustrated by independent determinations.

5. Permission to appeal was granted, the appeal against the order of 25 October 2002 was allowed with costs, and the ancillary relief proceedings were remitted to Black J. The costs below were reserved to her.

1. Court of Appeal (Civil Division): Permission to appeal granted and appeal allowed unanimously in [2003] EWCA Civ 202. The ancillary relief proceedings were remitted to the Family Division and reserved to Black J.

2. Birmingham County Court: His Honour Judge Hamilton dismissed the husband’s appeal on 25 October 2002, holding that the subsequently established debt did not justify disturbing the order because the district judge had found that undisclosed assets were available to the husband.

3. Coventry County Court: District Judge Cotterill determined the ancillary relief proceedings and made the resulting order on 23 August 2001. He treated the alleged debt and its assignment as unreal, found that the husband possessed undisclosed assets, and divided the available proceeds three-quarters to the wife and one-quarter to the husband.