Ali v Ansar-Ali

In a financial remedy appeal, notional asset valuations used to calculate a settlement do not necessarily create a guaranteed lump-sum entitlement. Where the first-instance judge intended earmarked investments, or their realised value, to pass to one spouse, the order should reflect that intention and the recipient should bear the risk of valuation changes, subject to any justified top-up.

A spouse who created a trust to frustrate the other’s claim could be ordered to pay the reasonable costs of dismantling it, but not an uncontrolled indemnity for excess costs. The court upheld the substantive 55:45 division, the portfolio-debt top-up and interim child maintenance funded from capital. Under the Civil Procedure Rules 1998, the appeal court could address an undertaking as part of the appeal.

The parties married in 1994, separated in 2011 and had two children living with the wife. The husband, a former banker, held substantial property and investment assets. The wife had limited earning capacity and substantial liabilities, including litigation debts.

The Central Family Court, Mr Recorder Feehan QC, made a financial remedy order transferring or attributing investment assets to the wife, requiring a top-up for liabilities in an investment portfolio, ordering child maintenance and requiring the husband to meet costs connected with dismantling a trust established to frustrate the wife’s claim. The husband appealed, challenging the order’s drafting, the guaranteed value of the assets, costs, earning capacity, maintenance and his undertaking. The central issue was whether the order reflected the Recorder’s intention and produced a fair result.

Appeal allowed in part. Lady Justice Black delivered the judgment, with which Lord Justice Lindblom agreed. The order was amended in two respects, while the substantive division of the assets was upheld.

1. The Recorder’s order was internally inconsistent. It capped the husband’s liability for the EFG portfolio but also required a balancing payment which effectively defeated that cap. The judgment showed that the Falcon Trust, EFG portfolio and ICDC portfolio were earmarked for the wife. She was therefore to receive the assets in specie or their net realised value, rather than a guaranteed lump sum based on notional valuations. The order was adjusted accordingly.
2. The Recorder was entitled to require the husband to top up the EFG portfolio. The liability secured against it could have been shared more equally, but the husband’s greater responsibility was justified by his post-separation personal spending.
3. The order requiring the husband to pay the costs of dismantling the Falcon Trust was justified by the finding that he had created it to keep wealth from the wife and frustrate her claim. However, because those costs were outside the usual domestic costs regime and beyond his complete control, the indemnity was limited to costs reasonably incurred.
4. The 55:45 division in favour of the wife was not unfair. The court considered the children’s welfare, the wife’s lower earning capacity, the fact that her share was tied up partly in the former matrimonial home and partly in a Duxbury fund, and the husband’s available property, investments and earning capacity.
5. It was not wrong in principle to require the husband to fund the children’s periodical payments from capital for the short period before his anticipated return to employment. His rental and investment income also contributed to the liabilities.
6. Under Rule 52.10 of the Civil Procedure Rules 1998, the appeal court had the powers of the lower court and could address the undertaking as part of the successful appeal. Detailed calculation and implementation were matters for the first-instance court. The undertaking was therefore partially suspended pending further consideration, without extinguishing the underlying liability.

• Court of Appeal (Civil Division): Allowed the appeal in part and amended the financial remedy order.
• Central Family Court: Mr Recorder Feehan QC made the financial remedy order on 17 July 2015.