Dr Azari Ebrahim Hilal Aldoukhi v Dr Maytham Mahmoud Haji Haidar Abdullah

An order directing jointly owned properties to be sold and the proceeds divided equally ordinarily gives each party a share of the eventual net proceeds, rather than a guaranteed figure based on provisional marketing appraisals. The power to vary an order under CPR 3.1(7) is constrained by finality, the avoidance of repeated litigation and the appellate process, and should be exercised promptly. Later damages may nevertheless be awarded for loss caused by a post-order breach. Where a party’s default caused receivers to be appointed, that party may be required to bear the additional receivership costs. A breach that causes delay does not establish recoverable loss where the eventual sale price exceeds the relevant market valuation.

The parties were former spouses who had previously obtained orders requiring the sale of three jointly owned properties and equal division of the net equity. The earlier judgment used marketing appraisals and referred to an illustrative net figure of £1,909,375 for each party. Two properties were sold after mortgage defaults led to the appointment of receivers. The third was subject to disputed lettings and delayed marketing but attracted an offer above the relevant valuation.

The applicant sought an account, damages and further payments, alleging that the respondent’s breaches had reduced the sale proceeds. The respondent argued that the earlier order required equal division of the eventual proceeds and that market conditions, rather than his conduct, caused any reduction.

1. Earlier order. The order dated 7 December 2021 required the properties to be sold and the eventual net proceeds divided equally. The figure of £1,909,375 was illustrative, based on marketing appraisals, and was not an entitlement fixed irrespective of the eventual sale prices.
2. Variation. Applying the principles in Tibbles v SIG Plc (trading as Asphaltic Roofing Supplies) [2012] EWCA Civ 518, the power under CPR 3.1(7) was subject to principled limits arising from finality, the undesirability of two bites at the cherry and the need not to undermine appeals. Alleged defaults occurring before the 2021 hearing could not now justify variation. They should have been raised at that hearing or promptly afterwards.
3. Post-order breach and causation. The respondent breached the order by failing to pay mortgage and service-charge liabilities. On the balance of probabilities, that default caused UBS to appoint receivers. The respondent was therefore responsible for the financial consequences of the receivership, including additional costs which would not have been incurred without the default.
4. The applicant failed to prove that the respondent obstructed the sales of The Piazza or Craven Street so as to cause loss. The eventual prices, after accounting for required payments, were close to the expert valuations. Although the respondent caused serious difficulties in marketing Albion Gate by installing obstructive tenants, there was no actual loss because the prospective sale price exceeded the expert valuation. The position could be reconsidered if the purchasers disappeared or the eventual price fell below that valuation.
5. The respondent was not entitled to retain the increase in Albion Gate’s price for himself. He negotiated on behalf of both parties. Conversely, he was entitled to retain rental income because the earlier arrangement required him to pay the service charges.
6. The net proceeds were to be divided equally. The respondent was to pay the receivership-related liabilities, service-charge arrears, the applicant’s share of the Craven Street furniture and £525,892 from his share of the Albion Gate proceeds. The interim charging order over The Piazza remained in force with liberty to apply and was to be discharged on completion of Albion Gate’s sale.

The judgment records that the earlier decision dated 18 November 2021, [2021] EWHC 3086 (Fam), was not appealed to the Court of Appeal. The present proceedings concerned post-order accounting, damages and enforcement issues.