El Farargy v El Farargy & Ors

Permission to appeal should be refused where the applicant shows neither a realistic prospect of success nor a compelling reason for granting permission. Minor inconsistencies or oversights in a lengthy judgment do not, by themselves, justify permission, particularly where the proposed appeal mainly challenges factual findings and would lead only to a retrial. A trial judge may draw conclusions from the absence of positive evidence where the case conflicts with an earlier successful case and transactions of the relevant magnitude would ordinarily be documented. Whether an allegation was sufficiently put to a witness depends on context. Separate, seriatim accusations are not invariably required where the case was clear. Proportionality and the need to bring continuing litigation to an end may weigh strongly against permission.

The wife brought contested ancillary relief applications against her husband. Sheikh Khalid, Wena Hotels Limited and McKellar Holdings Limited were also involved. The dispute concerned the funding and beneficial ownership of Egyptian hotel investments, the proceeds of related arbitration, and the wife’s entitlement.

After a six-week trial, Baron J rejected the husband’s and Sheikh Khalid’s evidence and the alleged agreements relied on in support of their case. She transferred two United Kingdom properties and a bond to the wife and ordered payment of a further £1 million from offshore monies.

The husband and Sheikh Khalid each sought permission to appeal. They challenged the judge’s factual findings, her treatment of documentary evidence, and the adequacy of the challenges put to witnesses. The central question was whether those complaints disclosed a realistic prospect of success or a compelling reason to grant permission.

1. Applications refused. Lord Justice Thorpe delivered the principal judgment, with Lord Justices Rix and Stanley Burnton agreeing. Neither applicant had shown a realistic prospect of success or a compelling reason to grant permission. The applicants were ordered to pay the respondent’s costs, subject to liberty to apply because no costs submissions had been made.
2. Absence of positive evidence. The trial judge was entitled to attach substantial weight to the inconsistency between the husband’s ancillary-relief case and the case he had successfully advanced before the arbitration tribunal. She was also entitled to regard transactions of the relevant magnitude as unlikely to have gone wholly unrecorded, and to conclude that the absence of positive evidence identifying external investors supported rejection of the husband’s case.
3. Putting the case to witnesses. The principles relied on from George Wimpey UK v VIC Construction [2005] BLR 135 did not prevent the judge from making findings about allegedly manufactured documents. The obligation to challenge a witness had to be assessed in context. The husband and his witnesses could not have been unaware that the wife’s case was that the documents had been manufactured for the proceedings. A separate accusation to each witness, in relation to each document, was therefore not essential. The judge was entitled to find that the challenges made were sufficient.
4. Appellate restraint. Findings about whether a business meeting had taken place and the purpose of a visit were essentially matters for the trial judge. Isolated inconsistencies or oversights in a very lengthy judgment did not require permission, especially where the proposed grounds principally concerned evidence and success would result only in a retrial. The scale and cost of the litigation made proportionality a powerful consideration against permission.

• Court of Appeal (Civil Division): refused the husband’s and Sheikh Khalid’s applications for permission to appeal and made a provisional costs order, with liberty to apply.
• High Court of Justice, Family Division: Baron J determined the contested ancillary relief applications, transferred two United Kingdom properties and a bond to the wife, and ordered payment of a further £1 million.