James Patrick McClean v Carey Elizabeth McClean & Ors

On an appeal from a financial remedy decision, the appellate court must review whether the lower court’s decision was wrong or unjust because of a serious procedural or other irregularity. Litigation misconduct and non-disclosure may justify adverse inferences, but they do not relieve the court of its duty to reach reliable findings from the evidence. Where companies are joined because their assets or interests may be affected, they must have a fair opportunity to prepare their case and be heard. A court must distinguish between the value of a party’s shares and the underlying assets and liabilities of a separately constituted company. Findings attributing corporate assets to a shareholder require adequate evidential and legal analysis.

The husband and five companies appealed against a final financial remedy order made by HHJ Ingram in the Family Court at Birmingham on 25 August 2022. The final hearing had proceeded in the absence of the husband and the companies. The husband challenged the refusal to adjourn, findings that he beneficially owned assets held by companies or third parties, and the valuation of the matrimonial resources. The companies challenged the procedure following their late joinder, the absence of a fair opportunity to participate, and findings that classic cars held by the companies were held on trust for the husband.

The central issues were whether the hearing and subsequent treatment of evidence involved serious procedural or other irregularity, and whether the findings on ownership and computation were safe.

1. The appeals were allowed. The husband’s appeal succeeded on Ground 1(iii), Ground 2 and Ground 3. The companies’ appeal succeeded on Grounds 1 and 2. The order made on 25 August 2022 could not stand. The claims were to be reheard.
2. Under Family Procedure Rules 2010, r.30.12, the appeal proceeded by way of review. The appellate court could interfere only where the decision was wrong or unjust because of a serious procedural or other irregularity. The refusal to adjourn was finely balanced but, viewed against the medical evidence and the husband’s litigation conduct, the trial judge was entitled to proceed with the hearing in his absence.
3. The later treatment of the case was different. Having permitted post-hearing submissions on computation, the judge had to explain why she rejected them. She also had to analyse the additional company accounts and other material sufficiently to support her conclusions. Litigation misconduct could not substitute for a rigorous assessment of the evidence or determine the substantive result.
4. The companies had been joined as separate legal entities with rights and interests to protect. Their short preparation period, the husband’s unavailability, and their exclusion from effective participation meant that ownership of their assets had been determined without a fair opportunity to be heard. The resulting findings were potentially unsafe.
5. The judge had also failed adequately to distinguish company property from the husband’s personal property. If assets belonged to a company, the relevant inquiry was ordinarily the value of the husband’s shareholding, taking account of corporate liabilities and extraction costs. The findings that the husband was beneficially entitled to the classic cars and other corporate assets lacked adequate evidential and legal analysis. The continuation of the freezing injunction was left in place pending directions. The parties were directed to take urgent steps towards a rehearing.

• High Court (Family Division): The combined appeals from the Family Court decision were allowed on the specified grounds. The final order was set aside and the financial remedy claims were to be reheard.
• Family Court at Birmingham: HHJ Ingram made the final financial remedy order on 25 August 2022 after a hearing conducted in the absence of the husband and the companies.