Colborne v Colborne

In financial-remedy appeals, an appellate court should respect the first-instance judge’s discretionary assessment where it is supported by the evidence, but must correct material failures to account for relevant liabilities, children’s immediate welfare, or the proper scope of a pension-sharing order. A party’s duty of full, frank and clear disclosure is independent of the questions asked by the other party. Persistent non-disclosure may justify an inference that undisclosed funds remain available. The general costs rule in financial-remedy proceedings is no order as to costs, but litigation conduct may justify departure. The award should reflect the costs caused by that conduct, rather than automatically the whole bill.

The parties had been married for 15 years and had three children, including twin daughters living with the husband in the former matrimonial home. The wife pursued ancillary relief following the breakdown of the marriage. The assets included English property, pension rights and property in Morocco. The first-instance judge treated the marriage as a long marriage, found substantial non-disclosure and missing assets, divided the resources unevenly to secure the wife’s position, ordered a pension share and required the husband to pay all relevant costs.

The husband appealed the financial order and the costs order. He challenged the valuation and treatment of the assets, the allocation of liquid English assets to the wife and illiquid Moroccan assets to him, the treatment of the children’s welfare, the pension-sharing order and the extent of the costs award.

1. Disposition. The appeal was allowed to a limited extent. The Court of Appeal did not disturb the overall discretionary approach or substitute the husband’s proposed division of the assets.
2. Assets and disclosure. The judge was entitled to accept the wife’s valuations of the Moroccan properties. The parties agreed that capital gains tax of £222,274 had to be taken into account. The husband’s duty to make full, frank and clear disclosure applied independently of the questions asked by the wife. His repeated failures justified scepticism about his explanations. Where sizeable family funds had been received and no clear account was given of their destination, the judge was entitled to infer that at least part remained available as a resource.
3. Distribution and children. The complaint based on the Wells v Wells line of authority [2002] 2 FLR 97 was rejected. The first-instance judge had seen the evidence, was better placed to exercise the discretion and had adequate material supporting the order. However, the requirement under section 25(1) of the Matrimonial Causes Act 1973 to give first consideration to the children’s welfare required proper attention to the short-term housing and schooling consequences. The former matrimonial home was therefore to be sold with the wife having conduct of the sale, but the husband and children could remain until completion, not expected before the February half term 2015 unless agreed.
4. Pension and cash orders. The £16,000 lump-sum provision was discharged because the money had been spent. The pension-sharing order was confined to 100% of the benefit of The Old Post Office, excluding other capital owed to the pension fund. The husband was responsible for ensuring that tax consequences relating to rental income did not prejudice the wife’s interest.
5. Costs. Under FPR 2010 Rule 28.3(6), the general rule was no order as to costs, but the husband’s conduct justified a departure. His conduct significantly increased the wife’s costs, but did not cause the whole bill. The award was therefore reduced from 100% to 80%, while the charging provision was maintained.

• Court of Appeal (Civil Division): In [2014] EWCA Civ 1488, the appeal was allowed to a limited extent. The financial order and costs order were varied as set out above.
• Reading County Court: On 29 May 2014, HHJ Simon Oliver made the ancillary relief order, including the transfer of the former matrimonial home and pension rights to the wife, and ordered the husband to pay the relevant costs.