Morgan v Morgan

On an appeal concerning the implementation of an ancillary-relief order, the Court of Appeal remains an appellate court even when considering fresh evidence. It must first decide whether the lower court was entitled to reach its conclusion on the evidence then available. Supervening events may nevertheless make that order inappropriate and justify setting it aside, without criticism of the lower judge.

Where competing sale proposals are advanced, the court may permit the spouse with the relevant financial entitlement to choose the option providing greater confidence and security. Relevant considerations included the deposit, an indemnity against failure to complete, and justified distrust arising from the other spouse’s financial misconduct and litigation conduct. The choice was not a punitive response.

The parties were former spouses whose ancillary-relief proceedings had resulted in an order that their jointly owned assets, including the former matrimonial home and adjoining development land, be sold and the net proceeds divided unequally in favour of the wife.

Following competing proposals from a third-party developer and the husband to purchase the property, HHJ Horowitz directed acceptance of the developer’s conditional offer. The husband appealed. By the time of the appeal, both the developer’s and the husband’s proposals had changed, and the Court of Appeal considered fresh evidence about price, completion, deposit, occupation and financial security.

The central issues were whether the judge’s original decision was wrong and whether subsequent events justified setting it aside.

1. Appeal allowed. The Court of Appeal set aside HHJ Horowitz’s order and made the order sought by the wife. The decision was not based on a finding that the judge had been plainly wrong.
2. The appellate court was considering fresh evidence, but remained a Court of Appeal rather than a court of first instance. It first had to ask whether the judge was entitled to reach the conclusion reached on the facts available at the time. The judge had made a rational, finely balanced choice in difficult circumstances and his original conclusion was not wrong.
3. Supervening events had nevertheless made the order inappropriate. The appellate court could therefore allow the appeal and substitute an order reflecting the parties’ current position, without criticising the lower judge.
4. The wife was entitled to reject the husband’s revised proposal and choose the third-party route because it provided greater confidence. The relevant matters included the husband’s failure to offer a 10 per cent deposit, his refusal to provide an indemnity if completion failed, and the wife’s justified lack of trust in him.
5. The husband’s earlier conduct in the ancillary-relief proceedings was material. His incomplete disclosure, breach of undertakings and dissipation of funds affected the security that the wife could reasonably require and prevented him from effectively arguing that her refusal of his proposal was unreasonable. Permitting the wife’s chosen route was intended to provide security, not to punish financial misconduct.
6. The order was made unanimously, with Lord Justice Scott Baker agreeing with Lord Justice Wall’s judgment.

• Court of Appeal (Civil Division): The appeal from the order made by HHJ Horowitz on 3 November 2006 was allowed. The order was set aside because supervening events had made it inappropriate.
• Southampton County Court: HHJ Horowitz directed acceptance of the third-party developer’s conditional offer for the former matrimonial home and adjoining land.
• High Court, Family Division: The earlier ancillary-relief order directed sale of the jointly owned assets and division of the proceeds, including a 62.5 per cent share for the wife and 37.5 per cent for the husband.