Davies v Davies

Permission for a second appeal may be granted only where the proposed appeal raises an important point of principle or practice or there is another compelling reason for it to be heard. An appellate court reviewing a discretionary ancillary relief order must accord substantial respect to the first-instance decision. It may nevertheless intervene where material computational errors have distorted the intended distribution or a subsequent change has made the original structure unworkable.

Liabilities must ordinarily be deducted when comparing the parties’ net positions. Future earning capacity does not justify disregarding existing debts. Where resources are limited, the court may also deduct outstanding legal costs if omission would undermine the rationale of its proposed order.

The husband sought permission for a second appeal from an ancillary relief order made by HHJ Caddick in the Tunbridge Wells County Court. The circuit judge had allowed the wife’s appeal from District Judge Lethem and enlarged her clean-break provision.

After the district judge’s order, the parties agreed that their care-home business should be sold rather than transferred to the wife. The circuit judge also identified failures to account consistently for liabilities, costs and the husband’s retained pension assets. He therefore restructured the award, transferring the matrimonial home and providing a variable lump sum intended to give the wife approximately one third of the assets.

The issues were whether that intervention exceeded the restricted appellate jurisdiction governing discretionary ancillary relief decisions and whether the proposed second appeal satisfied section 55 of the Access to Justice Act 1999.

1. Permission to appeal was refused. Under section 55 of the Access to Justice Act 1999, this second appeal required an important point of principle or practice or another compelling reason for a substantive hearing. Neither gateway was satisfied.

2. The circuit judge respected the restricted review jurisdiction described in Piglowska v Piglowski [1999] 1 WLR 1360 and reflected in rule 8.1(3) of the Family Proceedings Rules 1991. The agreement to sell the business had changed the landscape and required substantial reformulation of the original provision. Intervention was also required because the district judge’s computations contained serious errors.

3. The district judge should have deducted the parties’ liabilities when comparing their net positions. Existing debts could not properly be ignored by reference to anticipated future earnings. His treatment of costs was also incomplete. Given the parties’ relatively limited resources and the eventual order that each bear their own costs, the circuit judge was entitled to deduct all outstanding costs after notionally adding back sums already paid.

4. The district judge intended to award the wife about one third of the assets but omitted the husband’s retained pension assets from his final comparison. The resulting award was only about 26.57% of all assets. The circuit judge’s revised award, amounting to about £408,000 and approximately 30.61% of all assets, substantially implemented the intended division and met the wife’s accommodation and income needs.

5. The circuit judge permissibly transferred the matrimonial home as part of the overall award and provided for the lump sum to vary with the actual liquidation proceeds. That mechanism preserved the intended fractional division without awaiting completion of the sale.

6. Although some criticisms of the husband’s lawyers were potentially unfair and had been made without notice, an appeal could be based only on an arguable legal grievance of a party. The circuit judge had ample grounds to order each side to bear its own costs, including the wife’s successful appeal, the obvious computational errors and the absence of a Calderbank proposal from the husband.

1. Court of Appeal (Civil Division): The husband’s application for permission to bring a second appeal was refused in [2007] EWCA Civ 733.

2. Tunbridge Wells County Court, HHJ Caddick: The wife’s appeal was allowed. The ancillary relief award was restructured and enlarged on a clean-break basis, with no order as to the costs of that appeal.

3. Tunbridge Wells County Court, District Judge Lethem: The wife received the care-home business, a counteracting lump sum, part of the matrimonial home’s sale proceeds and a pension transfer. The circuit judge later found that changed circumstances and computational errors required substantial reformulation.