Gadhavi v Gadhavi

For financial remedy purposes, a resource may be available to a spouse under section 25(2)(a) of Matrimonial Causes Act 1973 even where a third party has legal and beneficial ownership and the spouse has no definable property interest under English law. The court must assess the practical reality, including family control and the likelihood of a request for funds or sale being met.

Courts must remain cautious about placing improper pressure on third-party donors. The distinction between a fiduciary trustee and a mere donor remains important, but it does not prevent a finding that prospective advancement is likely. A disputed valuation must be supported by reliable valuation evidence.

The husband appealed from a financial remedy judgment given by His Honour Judge O’Dwyer on 12 December 2013, with the order perfected on 6 February 2014. The parties had been married for many years and their principal asset was the former matrimonial home.

The judge treated property in India, legally and beneficially owned by the husband’s mother, as a financial resource available to the husband. He ordered the sale of the matrimonial home, giving the wife the first £200,000 of the net proceeds and dividing the balance equally. The husband challenged both the inclusion of the Indian property and its valuation.

The central issues were whether the property could constitute an available financial resource despite the absence of a recognised property interest, and whether the valuation finding was supported by admissible and reliable evidence.

1. Outcome. The husband’s appeal was dismissed on the issue of whether the Indian property was an available resource. It was allowed on valuation to the extent that the valuation finding and the order of 6 February 2014 were set aside. The matter was remitted to Judge O’Dwyer for directions and an urgent rehearing on valuation.
2. Available financial resource. Under section 25(2)(a) of the Matrimonial Causes Act 1973, a resource may be available to a spouse even though it is legally and beneficially owned by a third party and the spouse has no definable property interest under English law. The court must examine the reality of the arrangement. On the evidence, the husband’s position as head of the family enabled him to request that funds be made available or that the property be sold. The trial judge’s factual inferences were permissible.
3. Third-party interests. The caution against placing improper pressure on trustees, expressed in Thomas v Thomas [1995] 2 FLR 668 at 678, did not prevent prospective advancement on the facts. The distinction approved in TL & ML [2005] EWHC 2680 between a fiduciary trustee and a mere donor was material. A court cannot ordinarily assume that a mere donor will provide funds, but it may find that advancement is likely where the evidence supports that conclusion.
4. Valuation. Because the value of the resource was disputed, valuation evidence was required under Rule 9.15(3) of the Family Procedure Rules 2010. The trial judge had no reliable market valuation. The report relied upon was disavowed as out of date and was a taxation rather than a market valuation. The finding of a £400,000 value therefore could not stand.

• Family Court. His Honour Judge O’Dwyer gave judgment on 12 December 2013 in the husband’s financial remedy application. The order was perfected on 6 February 2014.
• Court of Appeal (Civil Division). The court dismissed the appeal on the availability of the Indian property, allowed it on valuation, set aside the valuation finding and order, and remitted the matter for directions and rehearing.