Musa v Karim

A financial remedy order may be challenged for material non-disclosure either by an appeal to the Court of Appeal or by an application to the first-instance court. The appropriate route depends on the circumstances.

Where fresh evidence raises a serious issue as to whether the order was obtained following material non-disclosure, the appellate court may remit the matter for judicial investigation without deciding whether the alleged non-disclosure occurred. The parties must have a proper opportunity to explain the new evidence.

Following the dissolution of their marriage, the wife and husband contested financial remedy proceedings marked by mutual allegations of dishonesty and inadequate disclosure. HHJ Hayward Smith QC preferred the wife's evidence, ordered an equal division of the disclosed assets and required the husband to pay 80% of her costs.

The husband sought permission to appeal. Fresh documents appeared to show that the wife had transferred inherited properties during the proceedings, contrary to the case accepted at trial. The wife disputed the significance of those documents and argued that any attempt to set aside the order for non-disclosure should have been made to the first-instance court.

The principal issues were whether the Court of Appeal could entertain the complaint and whether the fresh evidence required the financial order to be reconsidered.

1. Appeal allowed in part. The question whether the financial order had been vitiated by the wife's material non-disclosure was remitted for reconsideration, ideally by HHJ Hayward Smith QC and otherwise by another judge of the Family Division.

2. Thorpe LJ held that, pending authoritative resolution of the procedural divergence, a party alleging material non-disclosure may proceed either by appeal to the Court of Appeal or by an application to the first-instance court. The suitable route depends on the circumstances. The observations in Judge v Judge [2008] EWCA Civ 1458 did not establish that the husband's chosen procedure was improper. Morgan J agreed with Thorpe LJ. Sullivan LJ reserved his position on the wider divergence but was satisfied that the Court of Appeal had jurisdiction on these facts.

3. The fresh documents concerning four inherited properties were highly significant. They appeared inconsistent with the wife's case that she had previously surrendered her interests for a single payment. They also appeared to record transfers at a critical stage of the financial proceedings and potentially at an undervalue. Further documents concerning two confiscated properties and questions about two flats added to the need for investigation.

4. The wife's explanation did not remove the serious issue raised by the documents. The Court of Appeal made no finding about their reliability, the truth of the allegations or the eventual financial outcome. Those matters required investigation at a further hearing, at which the wife could adduce evidence from family members and Sudanese lawyers.

5. Permission was refused on the husband's challenge to the amount required to achieve equality because that ground had no realistic prospect of success. Permission was granted on the arguable contention that the order inadequately protected the husband against a sale of the matrimonial home at an undervalue, but that appeal was adjourned pending the remitted proceedings. No further ruling was required on costs because the judge reconsidering the substantive order could also vary the existing costs order.

1. Court of Appeal (Civil Division): In [2012] EWCA Civ 1332, allowed the appeal in part and remitted the question whether the financial order was vitiated by material non-disclosure. It granted permission on the sale-mechanism ground, adjourned that appeal, and refused permission on the challenge to the equalising sum.

2. Principal Registry of the Family Division: HHJ Hayward Smith QC accepted the wife's account of the disputed properties, ordered an equal division of the disclosed assets and ordered the husband to pay 80% of the wife's costs.