Sareen v Sareen

In financial relief proceedings, a voluntary division of matrimonial assets may provide the proper starting point for assessing fairness. If the division is fair, there is no principled basis for reopening it. The court must nevertheless investigate whether further relief is justified by surplus cash accruing afterwards, business assets omitted from the division, or future business income. The first-instance judge retains a particularly wide discretion in cases involving substantial wealth and uncertainty about the assets. An appellate court should not interfere where the resulting award is plainly within that discretionary ambit.

The parties married in 1987. The wife presented a divorce petition in September 2007. In March 2008, the husband voluntarily transferred assets in an arrangement which valued the wife’s share at approximately £34 million, although the wife remained entitled to argue for a different outcome.

After heavily contested financial relief proceedings, Munby J ordered a further capital payment of £7.5 million. The wife filed an appellant’s notice and sought permission to appeal, challenging the weight given to the voluntary division, the valuation date, omitted assets and assets generated after March 2008. The Court of Appeal considered whether the grounds justified a full appeal.

Application refused. Lord Justice Thorpe delivered the judgment, with Sir Scott Baker agreeing.

1. The wife’s complaints focused on the judge’s reliance on the voluntary division of assets, his valuation of assets as at March 2008, his treatment of assets existing but omitted from the schedule, and his failure to include assets generated after that date.
2. The first-instance judge had adopted a sound starting point. If the voluntary transfer made in March 2008 was fair, there was no principled basis for going behind it.
3. That approach did not exclude further inquiry. The judge was required to investigate whether the wife was entitled to additional relief for surplus cash accruing after March 2008, business capital omitted from the earlier presentation, or future income from the business.
4. The judge’s methodology was rational. The further lump sum was based on the value of omitted business assets and the other identified surplus or future resources. The resulting award of £7.5 million was plainly within the ambit of the judge’s particularly wide discretion, given the scale of the family fortune and uncertainty affecting several elements of its valuation.
5. Nothing advanced on the wife’s behalf justified referring the matter to the full court. The application for permission to appeal was therefore refused, bringing the proceedings to an end.

• Court of Appeal (Civil Division): In [2010] EWCA Civ 951, the application for permission to appeal was refused.
• Principal Registry of the Family Division: Munby J ordered a further capital payment of £7.5 million after considering the fairness of an earlier voluntary division of assets. The citation of that decision is not stated in the judgment.