Ngwu v Ngwu

An appellate court should rarely interfere with the amount of a financial order made after an extensive evidential hearing and upheld on appeal. Intervention requires a principled basis, assessed against the information properly available to the appellate court. When affordability is challenged, practical liabilities and realistic borrowing or recovery prospects may matter more than the existence of legal liabilities alone. A costs order may run from the date of a realistic settlement offer even where full disclosure followed shortly afterwards, particularly where the first-instance judge reasonably attributes the litigation’s escalation to one party’s conduct.

Following divorce, the parties disputed the division of their financial affairs. After a six-day hearing, the District Judge awarded the wife the most valuable property, ordered her to pay the husband a lump sum, and made a costs order against her from the date of his settlement offer.

The wife’s appeal to HHJ Hindley QC was permitted out of time but dismissed on 23 December 2008. Permission to appeal to the Court of Appeal was granted after Wilson LJ identified concerns about the timing of the costs order and the affordability of the financial outcome. The central issues were whether the costs order was premature and whether the financial order was practically affordable.

Lord Justice Thorpe gave the reasons for the court. Lord Justices Wall and Elias agreed.

1. Costs. The District Judge had made a reasoned discretionary decision. She found that the wife had largely caused the chaotic litigation through unrealistic proposals and inadequate disclosure, while the husband had made realistic offers. Although the husband’s offer preceded the exchange of Forms E by approximately one week, the District Judge was entitled to make the costs order from 24 November 2004. The timing of the offer did not make the order impermissibly premature in the circumstances.
2. Affordability. The affordability of the outcome had to be assessed by reference principally to the wife’s practical liabilities. Her solicitors’ unsecured debt was incurred on credit and might not be fully recoverable. The husband had offered to compromise his entitlement, and the wife could increase the mortgage on the property. Interest-only borrowing was considered affordable, and the property’s equity did not prevent further lending.
3. Appellate restraint. It would be rare for the Court of Appeal to interfere with the quantum of an order made by a District Judge who had heard six days of evidence, particularly where the order had been upheld by the circuit judge. On the fuller information before the court, there was no principled basis for interfering with the outcome.

The appeal was dismissed.

• Court of Appeal (Civil Division): The appeal was dismissed. The court upheld the financial order and costs order made below: [2009] EWCA Civ 675.
• Birmingham Civil Justice Centre: HHJ Hindley QC granted permission to appeal out of time but dismissed the wife’s appeal on 23 December 2008.
• District Judge: Following a six-day evidential hearing, the District Judge made the financial and costs orders challenged on appeal.