Meerna Ali Ghuloom Faraj v Sohail Sultan Ahmad & Anor [2026] EWCA Civ 962

[2026] EWCA Civ 962Case No CA 2023 002533, CA 2024 000065& CA 2025 001974
IN THE COURT OF APPEAL (CIVIL DIVISION)
Venue ON APPEAL FROM FAMILY COURT SITTING AT THE ROYAL COURTS OF JUSTICE[2023] EWFC 209
Sir Jonathan Cohen
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 24/07/2026
Before
LADY JUSTICE KINGLORD JUSTICE BAKERLORD JUSTICE FRASER
Between
MEERNA ALI GHULOOM FARAJClaimant/ Respondent
In the matter of:
Deborah Bangay KC and James Weale KC (instructed by Level Law) for First AppellantGiles Richardson KC and Jamie Randall (instructed by Ashfords LLP) for Second AppellantMichael Glaser KC and Thomas Haggie (instructed by Forsters LLP) for RespondentHearing Hearing date: 29-30 April 2026
Approved JudgmentThis judgment was handed down remotely at 11.00am on 24 July 2026 by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................

Introduction

[1]These are appeals from the judgment of Sir Jonathan Cohen (“the judge”) dated 28 November 2023 in financial remedy proceedings between Meerna Ali Ghuloom Faraj ("the wife") and Sohail Sultan Ahmad ("the husband") (Ahmad v Faraj [2023] EWFC 209). The Second Respondent, IIB Group Holdings (“IIB” or “the Bank”), is an investment holding company in Bahrain, of which the husband is the majority shareholder and a director.[2]The husband and IIB each separately appeal the judge’s order in relation to those parts of the order which are specific to them. In the husband’s case, that is payment to the wife of a lump sum of £6m. The husband also seeks permission to adduce fresh evidence in support of his appeal. IIB appeals the judge’s order by which, in the event that terms cannot be agreed with the wife whereby free housing is provided for her by IIB for a period of time, terms would be determined by the court.[3]The wife seeks an extension of time to file a cross appeal. If granted she thereafter applies for permission to appeal against the judge’s finding that a Forward Acquisition Property agreement (“FAP”) between the husband and IIB in relation to the former matrimonial home at Belgrave Place in London (“Belgrave Place”) was not, contrary to her case, a sham transaction.[4]The wife is granted an extension of time and permission to appeal. The application by the husband to adduce fresh evidence is refused. Reasons for each decision are given below.[5]In order to succeed in their respective appeals, both the husband and the wife need to dislodge findings of fact made by the judge at first instance. I have had firmly in mind the well-known passages in Volpi & another v Volpi [2022] EWCA Civ 464, [2022] 4 W.L.R. 48 ('Volpi'); Piglowska v Piglowski [1999] 1 WLR 1360 ; Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5, [2014] FSR 29 ; Re B (above), and Re A (No.2) (Children: Findings of Fact) [2019] EWCA Civ 1947; [2020] 1 FCR 313, [2020] 1 FLR 755 (' Re A (No.2) ') (at [92], and see also [93]-[99]) and am acutely conscious not only of the reluctance of an Appeal Court to dislodge findings of fact made after a trial by an experienced judge, but also the consequences for each of the parties of allowing the appeals and in setting aside the judge’s findings. I have however concluded that each of the appeals of the husband and wife must be allowed. I agree with Fraser LJ’s judgment also allowing the Bank’s appeal.[6]This outcome has been reached with considerable reluctance. All agree that the prospect of a retrial is shocking. The costs, which are extraordinary, reflect the bitterness and distrust between this couple at the end of their marriage. Notwithstanding that being the case, there must be a retrial of all the issues and none of the judge’s findings of fact whether the subject of appeal or otherwise can stand.[7]The Court asked the parties to provide information regarding each of their costs up to and including the appeal hearing. To date they are as follows: i) The wife: approx. £3.9m of which £2,506,493.00 is owed to Schneiders Financial Solutions as of 5 May 2026. The sum of £1,329,293.38 is interest on the principal drawdown of £1,177,200 and accrues at a daily rate of £1,163.43. ii) The husband: £1,446,475. The judge commented that the wife’s costs would be greater than those of the husband as much of the husband’s material was available from an earlier divorce. iii) IIB: £951,783.03.[8]Against this exorbitant expenditure, the judge found there to be the following assets:a. A property in Portugal with an uncertain value, possibly as little as $170,000;b. £16m in bank accounts subject to this appeal, known as the ‘Disputed Accounts’;c. The husband’s interest in IIB, valued at £7.5m;d. A debt owed to the husband by Ghouse Akbar (“GA”) of $25m with significant uncertainty as to payment and, in any event, which is not payable until 2031. The only asset in the UK is £1.5m secured on a property in London.[9]The judge ordered the husband to pay the wife a lump sum of £6,080,000 less the sum she receives from the sale of the Portugal property. This, he held, would provide a home, capitalised maintenance and, crucially, £2.25m towards her costs in order to clear her litigation funding (as it stood at the date of the trial).[10]It follows that the parties have to date incurred costs of approaching £6.5m, which has resulted in an order for payment to the wife of a lump sum of about £6m plus a short-term entitlement for her to live rent-free in a property owned by IIB.

The Appeals

[11]The husband appeals against the making of the lump sum order on the basis that the judge was wrong to find that he had £16m in the Disputed Accounts.[12]The wife’s case was that the FAP arrangement as between the husband and IIB in relation to Belgrave Place was a sham transaction. A finding of sham would have meant that the husband had at all times retained the beneficial as well as legal ownership of the property, making it susceptible to a property transfer order. The wife appeals against the judge’s finding that the FAP was a genuine transaction.[13]IIB was joined as a party to the proceedings specifically in relation to the validity of the FAP. The Bank’s case was that the FAP was valid and it was therefore the sole beneficial owner of Belgrave Place. On that basis, the Bank offered, after some “judicial encouragement” (as the judge himself put it), to sell the property and use the proceeds of sale to buy a property in which the wife and children could live until the youngest child turns 18. The wife and IIB were unable to agree terms. The judge, by paragraph 10 of his order of 15 December 2023, ordered the wife and IIB to “to endeavour to agree the terms of the purchase of the replacement property”. In the event that the wife and IIB were unable to agree terms, the order provided that the judge would “adjudicate on the issues upon which they disagreed”. IIB appeals paragraph 10 of the order, submitting that the judge had no jurisdiction under the Matrimonial Causes Act (“MCA 1973”) or otherwise, to make those orders against the Bank.[14]This judgment which is inevitably long given that the Court was hearing three separate appeals is structured as follows: i) The general background and proceedings leading up to the trial [15]- [42]; ii) The husband’s appeal in respect of the Disputed Accounts [43]-[115]; iii) The wife’s proposed appeal in relation to the FAP [116]-[147]; iv) IIB’s appeal in respect of the provision of a property for the wife [158]-[190].

Background

[15]The wife is 53 and the husband is 57. They began a relationship in 2011 in Bahrain and began cohabiting at the end of that year. They moved to England in January 2013 and married in Bahrain in April 2013. The parties’ relationship became strained in spring of 2020 and the wife issued her divorce petition on 12 October 2020.[16]There has been as the judge described it, “a blizzard of litigation” between the parties. The wife obtained a without notice non-molestation order and occupation order under the Family Law Act 1996 on 19 October 2020. These were discharged but then re-granted by Recorder Allen KC in March 2021 (“the FLA proceedings”).[17]The husband disputed the English court’s jurisdiction over the divorce and the validity of the parties’ marriage in Bahrain. In August 2021, the husband conceded jurisdiction and the marriage was dissolved. There have followed Children Act proceedings, an Immerman dispute, and two contested Legal Service Provision Order hearings (LSPO).[18]Permission to appeal having been granted to the husband by Moylan LJ, the judge, on 13 December 2024, ordered the husband to pay £120,000 by way of LSPO to enable the wife to defend his appeal. He appealed against the making of that order and, on 20 February 2025, his appeal was dismissed. The husband failed to pay and, upon the wife’s application, a Hadkinson orderwas made which contained the provision that if the husband had not paid the wife £120,000 by 11 July 2025 the husband’s appeal would be dismissed: Ahmad & Anor v Faraj [2025] EWCA Civ 468. The money was paid on 1 July 2025.[19]The parties have one child, A, born in 2014. A lives with the wife and her elder half-sister S. S is a child of the family who was born in June 2006. S is severely autistic, non-verbal and requires constant care. The judge accepted that given S’s extensive care needs, it would be uneconomic for the wife to return to work.[20]The husband was previously married and has two children from that relationship. Litigation followed the breakdown of the husband’s first marriage, reported as FZ v SZ [2011] 1 FLR 64. In his judgment, Mostyn J was critical of the husband’s disclosure and the encouragement from the husband’s father to minimise his assets. The husband’s assets were valued at £18m. His first wife was awarded c.£8m out of marital assets of £16m.[21]The husband’s case was that by early 2018 he had spent all the funds he had retained following his first divorce (c.£8.5m).[22]The wife accepted that by 2018 the husband had said to her on various occasions that he had run out of money. The husband said he was borrowing money from friends and family. The judge noted that there was “no obvious explanation” as to why he would do so if he “possessed significant funds” [27].

IIB Group Holdings Ltd (“IIB”)

[23]In 2015 the husband incorporated IIB. He invested £1.5m together with €2.3m borrowed from his father. The husband was initially a 99% shareholder. The Chief Financial Officer (“CFO”) is the husband’s friend of many years, Syed Husain (“Mr Husain”).[24]Following a restructuring of the shareholding in April 2019, the husband now holds 59.47%. “Gorillas”, a company owned by “the Alikhan brothers”, Dubai-based investors, held 20.92%. Mr Husain held 19.61%. The husband did not draw a salary from IIB until January 2020, although his remuneration after that included payment of a substantial bonus.[25]A dispute arose in the proceedings as to whether the husband owed c.60% or, as asserted by the wife, 80% of the company. This issue centred on whether the additional 20% in shares (previously owned by Gorillas) which had been placed in an ESOP (Employee Share Ownership Plan) was available to the husband. This dispute, which was referred to as the “Second Issue”, is not central to the appeals. The judge concluded that he could only safely treat the husband as owning c.60% of IIB.[26]At this time, the husband and Mr Husain were looking to expand IIB by way of takeovers. In a letter dated 30 June 2020, addressed to the husband and signed by Mr Husain in his capacity as CFO, it was recorded that the husband held five separate accounts in his name, which accounts had in total over £19m in cash in euros and dollars which was available to him.[27]The letter went on to include a paragraph in relation to confidentiality and a disclaimer in respect of the “accuracy or completeness” of the information.[28]On 2 November 2020, a second letter in the same terms was executed. This letter showed slightly reduced cash sums to be available to the husband, again held in dollars and euros, which amounted to £16,013,625. Different amounts were ascribed to each of the five accounts than in the letter of 30 June 2020.[29]The accounts referred to in the letters of June and November 2020 are referred to as the Disputed Accounts or the “blocked accounts”. On 9 June 2021, Mr Husain instructed PWC as the auditors of IIB to prepare a “Special Report for the Board of Directors”. The purpose of the report was to “certify for the purpose of confirming any related party activity involving the majority shareholder of IIB Group Holdings Ltd”.[30]PWC filed a report on 14 July 2021 in these proceedings. In it they set out that they had been engaged to “perform the procedures agreed with you on the financial information related to transactional history and balances with related parties of International Investment Bank”. PWC set out both the scope of their work and its limitations, saying that, had they performed additional procedures or performed an audit or review of the financial information related to the transactional history and balances with the related parties, “other matters might have come to our attention that would have been reported”. On that basis PWC did not identify any account to have been opened by the husband, the majority shareholder.[31]Meanwhile, the husband applied to have the ex parte non-molestation order and occupation order discharged. There followed contested Family Law Act proceedings heard over a number of days by Recorder Allen KC. The husband filed a witness statement in those proceedings, which was dated 29 November 2020 and signed by him with a statement of truth. In that statement he gave, for the first time, an account in respect of the Disputed Accounts:
“The only other meaningful bank account I have is an account with one of the subsidiary banks which (sic) owns. Although this has previously shown a sizeable deposit in excess of several million dollars, this is effectively a blocked cash account. What that means is that on the books of the bank the account in my name was credited with the money but the cash/ balance in the account can never leave the bank. The reason for this was two-fold. Firstly, it simply helped us to achieve certain regulatory reporting requirements in respect of gross deposit targets and secondly it allowed us to present the account as reflecting sufficient funds to support a bid we made to acquire another bank through one of our banking subsidiaries. In practice the account balance is zero as it does not represent cash which I could ever withdraw. On the books of the bank there is an asset (cash or cash equivalents) on the liability side there is the offsetting deposit. 232. Meerna had in the past asked about a letter from the bank setting out the deposit balance and I had explained the above to her. She may simply believe that this is not true and that in practice I have several million dollars offshore (which may be her motivation for bringing divorce proceedings), whilst we have unnecessarily struggled financially. Nothing could be further from the truth and if this is what she has based her financial relief claims upon she will find that there is no cash.”
[32]On 19 January 2021, Mr Husain filed his first witness statement in which he confirmed the evidence given by the husband in his witness statement. He also signed the statement with a statement of truth. Mr Husain accepted in oral evidence that he had simply adopted the explanation given by the husband in his witness statement.[33]The husband returned to the issue of the Disputed Accounts in a further witness statement of 21 January 2021. In it he again said that the wife had asked him about a letter from the bank and that she knew about the account as a consequence of having read Immerman documents. It must therefore follow that the husband believed that the letters were within the Immerman material and that the wife had read them. The husband again said the account existed and that, although it had “previously shown a sizeable deposit in excess of several million dollars”, this was “effectively a blocked cash account” and the effect of the deposit was “zero”.[34]The state of the husband’s own evidence as at January 2021 in relation to the Disputed Accounts was therefore that he had an existing account with one of IIB’s subsidiaries which contained “several million pounds”, but which was blocked in such a way that it could not be drawn upon by him. He had dealt with the Disputed Account in his statement, he said, because he believed that the wife had seen a letter to that effect. The husband referred to only one account even though by the time he filed his first statement, the second letter of 2 November 2020 had been signed by him and Mr Husain.[35]Moving on in the proceedings, in a directions order of 3 December 2021 under the heading “Statements dealing with Conduct”, it was ordered that either party who sought to run what is called a conduct case, was to file a concise statement addressing:
“(i) what conduct exactly they seek to rely upon; (ii) the basis for their conduct allegations; (iii) what effect this alleged conduct should have on the current financial remedy application”
. Neither side filed such a statement.[36]On 7 February 2022, the husband replied to the wife’s questionnaire which had been filed by her under Part 9 of the Family Procedure Rules 2010. In the questionnaire he was asked to identify the “blocked account” (the Disputed Accounts) referred to by him in his witness statements and to produce the statements to the accounts. The husband replied that he had provided a “voluntary explanation” of entries created in respect of IIB’s bid for a bank, namely Banco Commercial Atlantico, and it was not a reference to an “actual account”. The husband produced the PWC special report. The husband did not disclose either of the letters.[37]In one of the rare moments of common sense, an order was made on 15 January 2023 whereby the parties agreed that, without prejudice to either parties’ contentions, it was not in their interests to determine the Immerman issue in relation to the many thousands of pages of documents (referred to as the “Disputed Documents” and the “Additional Documents in Dispute”).[38]The matter finally reached Pre-Trial Review on 27 July 2023. Surprisingly, there was opposition on behalf of the husband to the Disputed Documents being reviewed by his legal team. The judge ordered the documents to be reviewed and made orders for disclosure including in respect of the Disputed Accounts, referred to in the order as the “cash account”. “i) 5a: The Respondent’s solicitors shall review both the Documents in Dispute and the Additional Documents in Dispute and disclose to the Applicant and the Second Respondent (by 4pm on 15 September 2023) all and any documents which assist the Applicant’s case whether directly or indirectly, undermine the Respondent’s case whether directly or indirectly or are otherwise relevant to any of the issues in the proceedings, to include (ii) Documentation pertaining to the ‘cash account’ as referred to in paragraphs 231 and 232 of the Respondent’s first statement within the Family Law Act proceedings (ZC20F00574) dated 29 November 2020; (viii) Any other documents which are relevant to the proceedings and which assist the Applicant’s case directly or indirectly.”[39]The husband filed his section 25 statement on 19 September 2023. No mention was made either of the letters or the “cash account” (the Disputed Accounts).[40]The wife filed her section 25 statement on 20 September 2023. In it she said that she believed that the husband had “extensive resources and that he [could] access funds from IIB”. She went on to say that she was unable to put a figure on his resources and doubted that the court would be able to do so either, but she considered that he had sufficient funds to meet her claims and to provide for himself. The wife concluded by saying that she believed that the husband had presented his assets in a dishonest fashion and that the assets and resources he had available to him were “far greater than he has chosen to display”.[41]Notwithstanding the directions given for disclosure, the husband did not disclose either the letter of June 2020 or November 2020 until they were produced respectively on the 4th and 7th day of the trial, and only then at the request of the judge in respect of the June letter (during the course of cross-examination of the husband) and, as to the November letter, when volunteered by Mr Husain during the course of his evidence.[42]In my judgment the letters were clearly disclosable. It is no answer for Ms Bangay KC on behalf of the husband to say that the husband had mentioned a letter in his FLA statement and it was therefore for the wife specifically to have asked for it over and above the question posed about the Disputed Accounts in her questionnaire. The judge’s order of 23 July 2023 was perfectly clear and the letters were undoubtedly “Documentation pertaining to the ‘cash account’”.

The Husband’s Appeal: The Disputed Accounts

[43]Ms Bangay has two Grounds of Appeal relating to the judge’s finding that the funds held in the Disputed Accounts were the husband’s to use as he chose. As the Disputed Accounts were the only potential source of funds available to the husband with which to satisfy a lump sum order, the finding was critical to the outcome of the case. The Grounds of Appeal are, in summary: Ground 1: The finding that the husband had a secret bank account containing c.£16m was procedurally unfair and/or made in the course of a trial that was procedurally unfair. Ground 2: Further, and in any event, the judge’s factual findings in respect of the alleged account were plainly wrong, were not supported by proper evidence and were contradicted by the other findings he had made.[44]Ground 1 alleges procedural unfairness in relation to two particular aspects: i) The wife should, Ms Bangay submits, have pleaded her case pursuant to [36] of TL v ML and Others (Ancillary Relief: Claim against Assets of Extended Family) [2005] EWHC 2860 (Fam),[2006] 1 FLR 1263 (“TL v ML”) which she submitted should apply regardless of whether third parties are involved. Failing that it is submitted that she should, at the very least, have given formal notice to the husband, even if her case depended on evidence that only emerged during trial. This would have allowed the husband to adduce further evidence and, if necessary, apply to adjourn. The husband contends that express representations by the wife’s leading counsel on the first day of trial led the husband to believe such a case was not being advanced at the hearing on behalf of the wife. ii) That the wife’s case in relation to the Disputed Accounts (that is to say that the accounts existed and the money held within them was the husband’s to withdraw as he thought fit) was not articulated on behalf of the wife until closing submissions. The husband was not therefore given fair notice of the case he had to meet, or an opportunity to challenge that case in cross-examination and in submissions.[45]In my judgment for the reasons below, the husband’s appeal on Ground 1 succeeds and there is therefore no need for the court to consider Ground 2.[46]As discussed at [42], in my judgment there can be no question but that the June and November letters should have been disclosed. The question then is whether Ms Bangay is right in law that allegations of non-disclosure must be pleaded in full at an early stage and should therefore have been pleaded per TL v ML in compliance with the judge’s direction in the order of 3 December 2021 referred to at [35] above. Ms Bangay submitted that, in accordance with practice and case law, an allegation of litigation misconduct in the form of non-disclosure is ‘conduct’ for the purpose of s25(2)(g) MCA 1973. Without such pleadings the court should not make adverse inferences against a non-disclosing spouse.[47]Section 25(2)(g) provides:
“(2)… the court shall in particular have regard to the following matters- (g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;” (g) the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;”
[48]Ms Bangay told the court that the common practice is now for all allegations of non-disclosure to be formally pleaded as s25(2)(g) conduct at an early stage. This leads in my mind two questions:(i) how that is to be done? It is one thing if a party is dealing with past financial behaviour, but what if the concern or discovery develops as the case proceeds and only at a later stage does it become apparent or possible that one spouse is not complying with their duty of non-disclosure? and(ii) is it a consequence of this asserted requirement for s25(2)(g) pleadings that conventional litigation misconduct in the form of non-disclosure, which ordinarily goes to computation, can be penalised by way of distribution rather than costs?[49]In Moher v Moher [2019] EWCA Civ 1482; [2020] 1 FLR 225 (“Moher”) one of the grounds of appeal was that the judge had failed to quantify the extent of the husband’s undisclosed financial resources and that he had, as a result, failed to undertake what was said to be a necessary element of every financial remedy judgment.[50]At [79] Moylan LJ explained that the circumstances in which one party might fail to comply with their disclosure obligations can vary significantly. He went on at [87] to say that, whilst the court should seek to determine the extent of the financial resources of the non-disclosing party, adverse inferences may be drawn: “[88] (ii) When undertaking this task the court will, obviously, be entitled to draw such adverse inferences as are justified having regard to the nature and extent of the party’s failure to engage properly with the proceedings. However, this does not require the court to engage in a disproportionate enquiry. Nor, as Lord Sumption said, should the court ‘engage in pure speculation’. As Otton LJ said in Baker v Baker, inferences must be ‘properly drawn and reasonable’. This was reiterated by Lady Hale in Prest v Petrodel Resources Ltd [2013] UKSC 34, [2013] 2 AC 415, [2013] 2 FLR 732, at para [85]: ‘ … the court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the facts are.’ [89] ... [90] (iv) How does this fit within the application of the principles of need and sharing? The answer, in my view, is that, when faced with uncertainty consequent on one party’s non-disclosure and when considering what Lady Hale and Lord Sumption called ‘the inherent probabilities’ the court is entitled, in appropriate cases, to infer that the resources are sufficient or are such that the proposed award does represent a fair outcome. … [91] This approach is both necessary and justified to limit the scope for, what Butler-Sloss LJ accepted could otherwise be, a ‘cheat’s charter’. As Thorpe J said in F v F (Divorce: Insolvency: Annulment of Bankruptcy Order) [1994] 1 FLR 359, although not the court’s intention, better an order which may be unfair to the non-disclosing party than an order which is unfair to the other party. This does not mean, as Mostyn J said in NG v SG, at para [7], that the court should jump to conclusions as to the extent of the undisclosed wealth simply because of some non-disclosure. It reflects, as he said at para [16](viii), that the court must be astute to ensure that the non-discloser does not obtain a better outcome than that which would have been ordered if they had complied with their disclosure obligations.” … the court is entitled to draw such inferences as can properly be drawn from all the available material, including what has been disclosed, judicial experience of what is likely to be being concealed and the inherent probabilities, in deciding what the facts are.’[51]In Moher, the essential conclusion of Moylan LJ was that judges were not required to provide a figure or bracket for the financial resources in every case even when confronted with non-disclosure. A finding of non-disclosure would, however, allow a judge to make adverse findings and to infer that the resources were sufficient or are such that a proposed award did represent a fair outcome. Moylan LJ reached that conclusion having conducted a review of the courts’ approach to issues of non-disclosure, starting with J-PC v J-AF [1955] P 215, [1955] 2 WLR 973 at [64] and Sachs J’s well-known observations that where a husband leaves a gap in the court’s knowledge, he cannot complain if the court “does not draw inferences in his favour”, and that, where two alternative inferences may be drawn, “the court will normally draw the less favourable inference”.[52]Mr Glaser KC on behalf of the wife submits that the wife has, from the very beginning, asserted that the husband had undisclosed assets that she was unable to quantify. Having satisfied itself that that was the case, the court, he said, was entitled to draw adverse inferences and to conclude that the husband had sufficient assets to meet the wife’s needs.[53]Mostyn J shortly after Moher considered the issue of non-disclosure in the context of litigation misconduct in the case of OG v AG [2020] EWFC 52 (“OG v AG”).[54]The wife in OG v AG had explicitly pleaded a case of conduct under s25(2)(g). Mostyn J identified four ‘scenarios’ in which he said conduct can rear its head in financial remedy cases: “34. …First, there is gross and obvious personal misconduct meted out by one party against the other, normally, but not necessarily, during the marriage….35. The conduct under this head, can extend, obviously, to economic misconduct such as is alleged in this case. If one party economically oppresses the other for selfish or malicious reasons then, provided the high standard of “inequitable to disregard” is met, it may be reflected in the substantive award.36. Second, there is the “add-back” jurisprudence. This arises where one party has wantonly and recklessly dissipated assets which would otherwise have formed part of the divisible matrimonial property. Again, it will only be in a clear and obvious, and therefore rare, case that this principle is applied.…37. …38. Third, there is litigation misconduct. Where proved, this should be severely penalised in costs. However, it is very difficult to conceive of any circumstances where litigation misconduct should affect the substantive disposition.39. Fourth, there is the evidential technique of drawing inferences as to the existence of assets from a party’s conduct in failing to give full and frank disclosure. The taking of account of such conduct is part of the process of computation rather than distribution.” (my emphasis)[55]Very often, as in this case, the husband’s non-disclosure will be relevant to both the third and fourth scenarios: non-disclosure is a form of litigation misconduct as well as an issue going to computation. Here there is the feature of the husband’s additional litigation misconduct in the form of his admission during the course of his oral evidence, referred to below, that he had lied in his witness statements which had been endorsed by him with statements of truth. That litigation misconduct should be “severely penalised in costs”.[56]Returning to OG v AG, Mostyn J, having conducted the computation exercise, turned to the wife’s pleaded conduct case. He commented that, at one time, the courts were courts of morals, but said:
“72….times have changed. The financial remedy court is no longer a court of morals. Conduct should be taken into account not only where it is inequitable to disregard but only where its impact is financially measurable. It is unprincipled for the court to stick a finger in the air and arbitrarily to fine a party for what it regards as immoral conduct.”
[57]In TT v CDS (Rev 1) [2020] EWCA Civ 1215, [2021] 1 FLR 996 (“TT v CDS”) Moylan LJ considered the scope of litigation misconduct. Both parties had filed conduct statements. The wife had relied on numerous ways in which she said the husband’s conduct had adversely impacted on the family’s financial circumstances. This included litigation misconduct. Moylan LJ addressed the issue of conduct at [61] onwards. “63. In my view, Mr Chamberlayne was right to accept that litigation conduct (or, as he more accurately described it, litigation misconduct) can be taken into account under section 25(2)(g). This is in part because, as he said, money spent on legal costs is no longer available for distribution between the parties and, as a result, no longer available to meet their needs or be shared between them. The depletion of the matrimonial assets will plainly not be remedied by an order for costs. Such an order simply reallocates the remaining assets between the parties. It does not necessarily remedy the effect of there being less wealth to be distributed between the parties.64. It is not necessary in this case to make other than a few brief observations about this issue.65. The general approach is that litigation conduct within the financial remedy proceedings will be reflected, if appropriate, in a costs order. However, there are cases in which the court has determined that one party’s litigation conduct has been such that it should be taken into account when the court is determining its award.66. An example is M v M, a case which pre-dated the current costs rules. In that case, Thorpe J added back resources dissipated by the husband so that, at p. 327, the available resources were the “notional sum … [of] nearly £900,000”. He awarded the wife £450,000. He explained his approach as follows, at pp. 331/332: ‘Conduct is only relevant in so far as the wife relies upon the manner in which the husband has conducted these proceedings. Ordinarily speaking, it seems to me that the manner in which proceedings are misconducted is to be reflected in orders for costs rather than directly in the scale of the awarded sum. However, this seems to me to be a quite exceptional case where the husband's strategy has been so gross and so extreme that it would be inequitable to disregard it. It seems to me that it is appropriate to look to the quantification of the wife's share not of what remains today but of what would remain today had that policy of waste and destruction not been pursued.’” ‘Conduct is only relevant in so far as the wife relies upon the manner in which the husband has conducted these proceedings. Ordinarily speaking, it seems to me that the manner in which proceedings are misconducted is to be reflected in orders for costs rather than directly in the scale of the awarded sum. However, this seems to me to be a quite exceptional case where the husband's strategy has been so gross and so extreme that it would be inequitable to disregard it. It seems to me that it is appropriate to look to the quantification of the wife's share not of what remains today but of what would remain today had that policy of waste and destruction not been pursued.’”[58]Pausing there, in my judgment care must be taken not to overinterpret Moylan LJ’s observation that litigation misconduct can amount to conduct under s25(2)(g). That is clearly the case as was said by both Moylan LJ and Thorpe J. The long established view however is that the manner in which litigation misconduct is ordinarily reflected is in costs rather than in the scale of the award. The example of M v M given by Moylan LJ above was an example of ‘addback’ as identified at number 2 of Mostyn J’s list set out at paragraph [36] in OG v AG above. As Mostyn J said in OG v AG [72] (at [53] above) “conduct should be taken into account “not only where it is inequitable to disregard it, but only where its impact is financially measurable”. It will only be in a rare case, such as in M v M where the conduct was so gross and had had such significant financial consequences, that the court’s disapprobation of the litigation misconduct will be reflected in the quantification of the award as opposed to orders for costs.[59]Ms Bangay’s case is that, as a consequence of Moylan LJ’s assertion that litigation misconduct can fall within s25(2)(g), there has been a shift in approach, and the routine requirement is now that whenever non-disclosure is alleged, the party making the allegation must at the earliest opportunity file formal pleadings. In response to a point explored with Ms Bangay that a wife may not know at an early stage that there had not been full disclosure, she moderated her submission to the extent of saying that there should, at the very least, be formal notification that non-disclosure was going to be advanced. She told the court that this is now effectively standard procedure and adopted across, certainly, the High Court.[60]Baker LJ took Ms Bangay to the rubric at Box 4.4 of the Form E which says:
“4.4 Bad behaviour or conduct by the other party will only be taken into account in very exceptional circumstances when deciding how assets should be shared after divorce/dissolution. If you feel it should be taken into account in your case, identify the nature of the behaviour or conduct below.”
[61]Ms Bangay accepted that Box 4.4 does not sit comfortably with her submission that non-disclosure litigation misconduct should have been formally pleaded as section 25(2)(g) conduct and that failure to do so meant that the court was not entitled to make adverse inferences in respect of the Disputed Accounts.[62]In Goddard-Watts v Goddard-Watts [2023] EWCA Civ 115, [2023] 4 WLR 20 (“Goddard-Watts”) there had already been two orders setting aside final financial remedy orders for non-disclosure. This was an appeal by the wife on the third determination of her claims. In her judgment, Macur LJ referred to TT v CDS:
“72. In TT, Moylan LJ acknowledged the “general approach is that litigation conduct within the financial remedy proceedings will be reflected, if appropriate, in a costs order. However, there are cases in which the court has determined that one party’s litigation conduct has been such that it should be taken into account when the court is determining its award”; at para 65. Notably, however, the cases which he subsequently reviewed mostly concerned the dissipation of assets in unnecessary cost wasting exercises which depleted the available resources and predicated a departure from equality in allocating the remainder of the assets having regard to the section 25 criteria in the 1973 Act. 73. The husband relies upon these authorities to differentiate his fraudulent non-disclosure from the ‘conduct’ referred to in Section 25(2)(g). The wife makes clear that ‘conduct’ as such is not the foundation of her case but draws our attention to Coleridge J’s judgment in H v H [2006] 1 FLR 990 that “the proper way to have regard to the conduct is as a potentially magnifying factor when considering the wife’s position under the other subsections and criteria. It is the glass through which the other factors are considered”; at [44]. Further, although there are “numerous cases decided in relation to conduct” in the end they are so fact specific to provide very little guidance. The provisions of Section 25 “rules the day”. 74. I agree with the husband that there is no direct financial consequence to his fraudulent misconduct so as to enable its monetary evaluation. However, I take the view that the husband’s fraud is ‘conduct’ for the purpose of subsection 2(g) in that it provides ‘the glass’ through which to address the unnecessary delay in achieving finality of the wife’s overall claim, including her unanticipated contribution to the welfare of the family post 2010. I make clear that I do not suggest that this necessarily means that she will receive an increased award, whether on the basis of a ‘sharing’ or ‘needs’ approach, but that she is entitled to seek to make her case on a blank page approach.”
[63]In Goddard-Watts the wife was not running a section 25(2)(g) conduct case. With respect to Macur LJ, I do not regard it as adding anything to approach behaviour which it is not asserted to be conduct for the purposes of s25(2)(g), as “a potentially magnifying factor when considering the wife’s position under the other subsections and criteria” or that it is “the glass through which the other factors are considered”.[64]Coleridge J’s comment, upon which Macur LJ relied, should be approached against the backdrop of the appalling facts in H v H (Financial Relief: Attempted Murder as Conduct) [2005] EWHC 2911 (Fam), [2006] 1 FLR 990. (“H v H”). In that case, the husband’s personal conduct had more than crossed the exceptionality/high threshold test of s25(2)(g). He had tried to murder the wife, and his actions had had a devastating financial impact on her. Coleridge J considered the husband’s conduct at [43] to be at the “very top end of the scale under subsection (g)”. He went on to consider how this should impact on the final award:
“44. How is the court to have regard to his conduct in a meaningful way? I agree with Ms Jacklin that the court should not be punitive or confiscatory for its own sake. I therefore consider that the proper way to have regard to the conduct is as a potentially magnifying factor when considering the wife’s position under the other subsection and criteria. It is the glass through which the other factors are considered. It places her needs, as I judge them, as a much higher priority to those of the husband because the situation the wife now finds herself in is, in a very real way, his fault. It is not just that she is in a precarious position, which she might be for a variety of medical reasons, but that he has created this position by his reprehensible conduct. So she must, in my judgment and in fairness, be given a greater priority in the share out.”
[65]The conduct, he said at [45], “has more or less destroyed her earning capacity, and in particular destroyed her much-loved police career”. There was therefore a clear financial consequence of the husband’s conduct which did reach the s25(2)(g) threshold.[66]It follows that I would agree with what Peel J more recently said in N v J [2024] EWFC 184, [2024] 4 WLR 64 (“N v J”): “37. I tentatively take the view that the words at para 74 of Goddard-Watts do not in fact represent a new departure from the traditional view (endorsed by the Court of Appeal at paras 70 and 71) that financial consequence is invariably a necessary ingredient for conduct to be reflected in the award. In my judgment, there should be an identifiable financial impact even if it is not always easily measurable. And as I said in Tsvetkov v Khayrova there must be a causative link between the conduct and the financial consequence.” (my emphasis)[67]In my judgment Coleridge J’s reference to the glass through which other factors are considered was his way of describing how the impact of the financial damage done by the egregious conduct on the part of the husband would be reflected in the enhanced distribution in the wife’s favour by reference to other s25(2) factors. This approach is crystallised by Peel J in Tsvetkov v Khayrova [2023] EWFC 130, [2024] 4 WLR 59. (“Tsvetkov v Khayrova”) At [43] Peel J considered the proper approach to conduct:
“43. A party asserting conduct must, in my judgment, prove: i) the facts relied upon; ii) if established, that those facts meet the conduct threshold, which has consistently been set at a high or exceptional level; and iii) that there is an identifiable (even if not always easily measurable) negative financial impact upon the parties which has been generated by the alleged wrongdoing. A causative link between act/omission and financial loss is required. Sometimes the loss can be precisely quantified, sometimes it may require a broader evaluation. But I doubt very much that the quantification of loss can or should range beyond the financial consequences caused by the pleaded grounds. This is stage one. 44. If stage one is established, the court will go on to consider how the misconduct, and its financial consequences, should impact upon the outcome of the financial remedies proceedings, undertaking the familiar s25 exercise which requires balancing all the relevant factors. This is stage two.”
This is stage two.”[68]I would add, in passing, that when Peel J said “how the misconduct … should impact the outcome”, he was clearly not mandating that there will be an impact because, as he said, the court still has to balance all the relevant factors, including conduct, when determining the fair outcome. The issue of whether and, if so, how remains a matter within the court’s discretion. Peel J went on at [46] to set out what he says is the appropriate procedure requiring pleading and active case management where there are or may be, conduct issues.[69]Peel J recognised that “in some instances alleged conduct may rear its head after provisions of Forms E” [46(vii)]. He gives the example of add-back, where the dissipation of assets occurs in the lead up to trial. In that instance, he said, the conduct claim “must be brought before the court as soon as possible so that it can be case managed appropriately”. He goes on to say that “wherever conduct is relied upon, and the court permits it to be advanced at trial, it should be pleaded” [46(viii)]. It is worth noting that in Tsvetkov v Khayrova Peel J at the preliminary hearing that resulted in this judgment, had refused to allow conduct to be argued at trial.[70]He concluded, however, by saying that:
“47. Finally, and for the avoidance of doubt, this suggested procedural route will not be necessary or appropriate where a party relies only on litigation misconduct. The court will ordinarily be able to deal swiftly with costs at the hearing in time honoured fashion.”
[71]I do not accept Ms Bangay’s submission that TT v CDS reflects a “shift in approach” based, as it was, on established authority. Nor, in my judgment, is there anything in Tsvetkov v Khayrova which supports there having been a change of approach to litigation conduct which Ms Bangay says has been implemented or which goes beyond Moher. In particular, subject to my observation above, I would endorse that the suggested procedural route proposed by Peel J requiring pleadings at an early stage are, as stressed by him, neither “necessary or appropriate” when a party relies only on litigation misconduct which can generally be dealt with by way of costs.[72]As referred to above, non-disclosure is a form of litigation misconduct. Where there is non-disclosure, the court will first be concerned with how this impacts computation, drawing inferences as appropriate. As Mostyn J noted, drawing adverse inferences is an “evidential technique” used to determine the existence of assets rather than a means of altering the division of those assets on the basis of a party’s behaviour. Non-disclosure may then be “penalised” as litigation misconduct after the computation and distribution stages in the form of an order for costs. Only rarely will litigation misconduct be reflected in the distribution of the assets following a finding of 25(2)(g) conduct.[73]In support of her argument, Ms Bangay prays in aid Mostyn J’s judgment in TL v ML which, she said, is authority for her proposition that there must be formal pleadings where non-disclosure litigation misconduct is alleged. In that case, there was the familiar dispute between a spouse and a third party as to the beneficial ownership of a property. Mostyn J said at [36]:
“In my opinion, it is essential in every instance where a dispute arises about the ownership of property in ancillary relief proceedings between a spouse and a third party, that the following things should ordinarily happen: i) The third party should be joined to the proceedings at the earliest opportunity; ii) Directions should be given for the issue to be fully pleaded by points of claim and points of defence; iii) Separate witness statements should be directed in relation to the dispute; and iv) The dispute should be directed to be heard separately as a preliminary issue, before the FDR.”
[74]TL v ML relates to disputes between a spouse and a third party as was the case here as between the wife and IIB. The procedure prescribed by Mostyn J was precisely the procedure which was adopted in relation to consideration of the issues relating to the FAP, even to the extent that initially the matter was listed to be dealt with by way of a preliminary hearing. In my judgment the same procedure could not have been applied to the Disputed Accounts because (i) the only identified TL v ML type of dispute arose in relation to the FAP and(ii)the dispute was between spouses not between the wife and a third party namely IIB. In any event, the wife’s case was that the husband had unspecified assets which he had not disclosed and that he could draw funds from IIB, she was not saying that she could identify conduct that would satisfy s25(2)(g) and required pleading. Rather, she was putting a case of Moher type inference and was doing so right up to the closing submissions, asking the judge to make adverse inferences in the light of the husband’s alleged non-disclosure. I again endorse Peel J’s observation that where there is a straightforward allegation of litigation misconduct, here in the form of non-disclosure, pleadings are neither necessary nor appropriate.[75]It follows that in my judgment those representing the wife did not have to file formal pleadings and that adequate notice was given from the earliest stage that her case was that the husband had undisclosed resources and could draw on IIB for them. It follows that the judge was not forestalled by the absence of formal pleadings from making any adverse inferences he felt to be appropriate in the light of the husband’s non-disclosure and he would have been entitled to penalise this litigation misconduct in costs. Equally, where there is an identified asset, a judge is entitled to make a specific finding of fact as to the value of that identified asset providing the finding is sufficiently supported with reasons.[76]Mr Glaser filed an opening note. In the second paragraph he stated unequivocally that the wife’s case was that the husband had manifestly and significantly failed to disclose the true extent of his assets and resources and that the Court would not be in a position fully to work out what they were with precision.[77]Ms Bangay flagged her concerns to the judge, even before the start of the trial saying that she was “disabled from cross examining the wife as her case was opaque. No positive case was being put forward by the wife and she needed to know the case in order to cross examine”. It was not enough, she submitted, for Mr Glaser to say that there were hidden assets.[78]Mr Glaser’s response was that as the wife was not able to point to, say, a particular Swiss Bank Account, she could not give any direct evidence on what assets were being hidden. The judge commented that it is sometimes easier to say that there are hidden assets than to say what they are, and that whilst he recognised that his findings had to have “a solid evidential basis”, the court needed to see how the evidence developed.[79]It follows, therefore, that at the start of the evidence the wife had in her written material stated unequivocally that the husband had access to significant sums of money through IIB but was unable to provide further detail. Ms Bangay’s submissions on appeal by reference to the trial[80]The wife’s principal line of questioning of the husband, Ms Bangay submitted, was premised on the basis that the two letters were false. The evidential value of establishing that the letters were false was she said to reinforce the wife’s case that the FAP was also a sham. Accordingly, the husband, she said, had no fair opportunity to give evidence in answer to the case ultimately advanced by the wife, namely that the accounts existed and contained funds available to him.[81]Ms Bangay submits that it is irrelevant that the husband always knew of the existence of the two letters: what matters is whether the husband was given fair warning of the case he had to answer. In addition, it was wrong, she said, to criticise the husband for not producing the letters given he was not asked to do so and he was under no obligation to produce them. This does not, she said, justify the husband being deprived of a fair opportunity to answer the wife’s case. The allegation that the husband “was worth millions” could not be characterised as giving fair warning.[82]It was also wrong, Ms Bangay said, to conclude, as the judge did, that the husband “cannot be ambushed by the revelation of his own deceit” [178]. Such an approach would deprive the husband of a fair trial by implying that because aspects of the husband’s conduct were dishonest, he cannot complain about procedural unfairness. Proper procedure is important where serious allegations of fraud or deceit are made. Ms Bangay referred to Three Rivers District Council v Bank of England (No.3) [2001] UKHL 16 at [5]. In that case the use of the Bingham report of 1992 was not permitted in the litigation notwithstanding that it was produced by an eminent judge. Lord Steyn said that “not only was such use of the report ruled out by settled principles of law but on broader grounds it was also unfair to the claimants. After all, the report was the outcome of a private inquiry, the claimants were not represented before Bingham LJ and the case against the Bank was not put by counsel.”[83]As to the suggestion that the husband should have applied to adjourn the trial or to be recalled, Ms Bangay submitted that there was insufficient time left after the wife’s closing submissions and evidence had long-since been closed. It was not for the husband to apply to be recalled but for the wife to give fair warning of her case.[84]In order to make good her submissions that the first time the wife put her case that money existed in the Disputed Accounts was in closing submissions, Ms Bangay needed to make detailed reference to the transcripts of the trial and the written position statements of the parties.[85]The court was taken to the evidence of both the husband and of Mr Husain. In contrast to the husband’s earlier written statements made in the proceedings in which he unequivocally said at least one account “existed”, the husband now said in oral evidence that no accounts were ever generated, and that the earlier statements were “misleading”, for which he apologised. When it was put to him that Mr Husain had also said that an account was generated, the husband said that “I think Mr Husain, unfortunately once again simply put what I had said in my own statement”.[86]The judge ordered the husband to produce a copy of the letter the wife had seen in the Immerman material which he had said had prompted him to provide an explanation of the Disputed Account in his witness statement. The letter was produced via Mr Husain’s solicitors and the husband was asked about it. When questioned it rapidly became clear that there was in fact a second letter which had not been produced. When asked why the second letter was not mentioned in the witness statement, the husband said that “because to the best of his recollection it was never executed as a document.” This was further prevarication; when in due course the November letter was produced by Mr Husain, it was (save for the figures) in identical terms to the first letter and was signed and dated by both the husband and Mr Husain.[87]The transcript shows a somewhat confused and confusing cross-examination with many interjections by the judge. The focus of the questioning by Mr Glaser was that the letters were dishonest and signed in order to mislead the regulators and a bank that IIB might wish to make a bid for. Critically, at no stage was it put to the husband that the accounts had actually existed and that the money in them was available to the husband for his own use rather than being a “blocked account”. The husband’s evidence was that there had never been an account and that the letter was intended to show ready liquidity for the purpose of making a bid for another bank. In reality, he said, the liquidity was tied up in the capital of the bank and would have had to be liquidated over time. The husband eventually admitted that the letter was dishonest but said that it had never been used. The husband accepted that he had perjured himself in his witness statements.[88]The flavour of the questioning can be taken from this short passage:
“H: This letter would seem to suggest that I have available funds of $20m. Mr Glaser: And this is a sham letter, because you didn’t, as at the date of the letter have $20m in deposits which was available, correct? H: The deposits didn’t exist because the structure hadn’t been implemented Mr Glaser: And the funds, more importantly, were not available if it had been created because it would have been in a blocked account. So there’s two lies. The first one is that deposits were created but, My Lord is looking confused, Mr Sultan accepted that because it would have been in a blocked account, because it would have been back to back, they were not available funds that this man could draw out. Judge|: Well would it have been in a blocked account? H: The money would never leave the bank, My Lord Mr Glaser: Precisely, so it’s never, that was the answer this man gave right at the beginning of his, of this morning’s evidence that it was not available money, and therefore this was a sham, wasn’t it Mr Sultan. Perpetrated by you and Mr Husain…”
H: The deposits didn’t exist because the structure hadn’t been implemented

H: The money would never leave the bank, My Lord

[89]The husband accepted that PWC had been requested to conduct an analysis because he was concerned that the June letter would be held against him. PWC, he said, undertook an exercise to see if there were any accounts in his name or any party related to him.[90]Mr Husain gave evidence. He accepted that the regulators would have had a negative view of the creation of sham documents by the bank and that Mr Bin Latif, the non-executive director, did not know about the creation of the sham letters and would have had a poor opinion of it.[91]In contrast to the husband, it was put to Mr Husain that “the other possibility” was that the accounts were “genuinely true”. Mr Husain denied that that was a possibility. Mr Glaser reminded Mr Husain that the wife’s case was that the husband had other sources of money and that Mr Husain had written a letter on 30 June 2020 saying that the husband had £19m.[92]It was at this stage that Mr Husain said that there had been two letters and offered to make the second letter (November) available to the court.[93]The judge, rather than counsel, made it clear to Mr Husain that what was being put was that the letters were the truth. Mr Husain denied that that was the case. Mr Glaser picked up the judge’s thread and went on to suggest that the reduction in the amount of alleged funds in the Disputed Accounts between the June and November letters was consistent with the accounts being genuine and that the decrease was the result of money being spent by the husband on litigation. When it was put to him that either the letter was a lie and a sham, or the husband did have $22m, Mr Husain accepted that the letter was a sham, that he had created it and that anyone reading the letter would have been misled. The letter, he said, should never have seen the light of day and he spoke of his “severe embarrassment”.

Judgment on the Disputed Accounts

[94]The judge started his analysis in the judgment by noting that the wife’s case was that the husband had tens of millions of pounds which were undisclosed. He said that she was “vague about the basis for her assertion” but the judge thought that hardly surprising given the husband handled all the family finances. He went on to say at [89] that:
“Remarkably, the evidence which really supported her assertion appeared as late as days 4 and 7 of the hearing, being respectively during the cross-examination of H and Mr Husain, when each in evidence referred to letters which I then ordered to be produced.”
[95]The judge then set out the detail of each of the letters saying that, on the face of it, this was “persuasive evidence of H’s funds”. The judge went on to summarise how the husband and Mr Husain put their case:
“93. ...Yes, these letters were written but there was never any truth in them. They were letters that were prepared to give an impression of wealth at a time when IIB, a smaller bank, was trying to buy a Lisbon bank, which was bigger. To show themselves as serious players, IIB and its directors tried to “big themselves up” (my words but accepted) as players of substance. The letter would be utilised at an early stage of the bid, as it were, to get their foot in the door before the true position would become apparent during the normal pre-acquisition investigatory procedure. But, they say, these letters were never produced to anyone, and no use was made of them. This, they argue, makes them a red herring.”
[96]The judge then, at [94], set out 10 questions which he said made the issue of the Disputed Accounts the “most puzzling aspect of this case”. They included questions as to why the letters were prepared if they were not to be used when their contents were deliberately deceptive and, if they were never used, why were they signed and dated. The judge questioned why, if the accounts never existed, the June and November letters showed a reduction in the accounts of $3.5m in 4 months.[97]The judge considered that the husband’s answer, that the reason the letters had not been produced earlier was because they had not been asked for, carried no conviction. The judge noted that the November letter was only produced after the husband’s evidence was finished so he was not questioned about it. He found it “incredible” that a man “as precise” as Mr Husain was unable to answer the questions which puzzled him, such as why there was a reduction in the alleged amounts in the accounts between June and November 2020.[98]The judge moved on to set out the various written accounts that the husband and Mr Husain had given, as set out at [31]-[34] above, summarising their position as follows:
“97. They both now say that this was also untrue and that the accounts never existed at all. Their statements are lies. They accept the corollary that they have entered into a scheme intended to mislead and then concocted an untrue explanation for the court.”
[99]The judge recorded that the letters could not be reconciled with the husband’s apparent illiquidity in 2017/2019 and whether “some fortunate event occurred is surmise” [98].[100]The judge then considered the fact that in June 2021 the husband and Mr Husain commissioned accountants in three jurisdictions, as well as PWC, who found no accounts in IIB Group holdings in the husband’s name or the two entities with which he was closely connected. The judge’s conclusion in relation to the same was that:
“99. …I accept as Mr Glaser KC and Mr Haggie stress, that they were dependent on the material provided to them by H/the bank and, more importantly, their inquiry was not on joint instruction but commissioned by the wrongdoers and has not been the subject of scrutiny. Bearing in mind the fact that the 2020 letters had not then been disclosed by H or Mr Husain, it would have been interesting to hear why they felt it necessary to give this instruction; presumably to back up the false story contained in their statements.”
[101]Having considered the law on non-disclosure

the judge concluded his analysis as follows:

“104. I have wrestled with this issue, the hardest in the case. Are the letters a part of the presentation by H/IIB to others of being a man or entity of substance and to present an exaggerated picture of wealth or are they the truth? 105. I look at the totality of the evidence, including that of the accountants, and ask myself what is the most probable explanation. Have two highly qualified individuals written letters setting out the truth or have they written what are deceptive and dishonest letters? In either event, they admit that they then wrote statements verified by statements of truth that were untrue. 106. The repeated lies about these letters, together with the factors set out at paragraph 94 above, persuade me that they are more likely to be true than false. If I am in error, H has only himself to blame. 107. I do not know where the money came from or where it now is, but that there is some at least of it left is probable.”
[102]There was no further analysis and the judge’s own observations as to other matters including the husband’s illiquidity between 2017-2019, his borrowing of funds at that time and that he drew no wages until January 2026, did not feature and were not therefore put into the equation before he concluded that the letters were a true record of the husband’s available funds held in those accounts. The judge held that the husband had “savings of £16m as per the November 2020 letter, wherever and in whatever sum they may now be” [147].[103]It was as a consequence of this finding that the judge ordered the husband to pay to the wife a lump sum of £6.08m made up of a £2.2m housing fund, capitalised maintenance of £1.56m representing £75,000 per annum and payment of the wife’s costs at £2.25m.[104]The judge concluded by saying that he was in little doubt that at some stage the husband would come into further substantial wealth. IIB is likely to be sold, he said, and the husband would receive 60% of the proceeds, or more if he were to benefit from the ESOP holding. This was a somewhat surprising observation given his earlier finding that the husband had no present interest in the ESOP. Following the distribution of the draft judgment, Ms Bangay sought a reconsideration of the findings in relation to the Disputed Accounts on the basis that the outcome was unfair and the husband had not had a fair hearing. The judge refused, saying that the suggestion the husband had been ambushed was unsustainable: “he cannot be ambushed by the revelation of his own deceit” [178].[105]In her submissions to this Court, Ms Bangay prayed in aid a number of matters which, whilst skilfully put, do not in my judgment help her: i) It was not enough, Ms Bangay said, that the husband was aware from the outset that the wife’s case was that he had ‘many millions’ and that he had access to funds from IIB. ii) Ms Bangay’s case is that the allegations of non-disclosure are conduct for the purposes of s25(2)(g) and have to be pleaded or, at the very least, that formal notice should be given well in advance. Failure to have done so, she says, amounted to procedural irregularity. Ms Bangay accepts that the fact of non-disclosure can and often does emerge during the course of a trial. Section 25(2)(g) conduct looks backwards at past behaviour and, as is identified on the Form E, goes to distribution. In my judgment this was a case of pure litigation conduct and would not, as for example in a case of add-back, have required formal pleadings. iii) The submission that the failure to produce the letters was not non-disclosure as the wife did not ask for them is unsustainable given the order for disclosure and the questionnaire each of which were specifically in relation to the Disputed Accounts. iv) Ms Bangay strongly urged the Court to accept that the onus had been on the wife to recall the husband once the November letter had been produced by Mr Husain. Again, in my submission that is unsustainable. It was the husband who had put himself in this position; he admitted lying in his witness statements and had failed to produce the letters until required to do so by the court. Even then he produced only the first letter despite knowing that there was a second letter. It was open to Ms Bangay to apply to recall the husband, especially as it had now been put to Mr Husain that there “was a possibility” that the money was the husband’s and Mr Glaser had, in his closing for the first time, included the Disputed Accounts in his computation of the assets. v) The husband has renewed his application made to the judge to adduce fresh evidence which, he says, will establish that there never were any accounts set up and that the account that he and Mr Husain gave in oral (as opposed to their written) evidence was the truth. It followed he said that at no time were many millions of pounds held in an account in the husband’s name. The judge refused the application at [177] onwards on the basis that the evidence he now sought to adduce was available at trial and therefore did not fulfil the Ladd v Marshall criteria. The position remains the same. The husband’s current application is, to all intents and purposes, an informal appeal against that ruling. It continues to be the case that the evidence the husband now seeks to rely upon and to obtain, was available at trial and that, as the judge noted, an application could have been made to recall the husband or for there to be an adjournment in order for further evidence to be adduced in light of how the wife put her case at the close of the evidence. The application to adduce fresh evidence is refused.[106]Where then does that leave Ground 1 which says that the trial was procedurally unfair and that the wife did not put her case until closing submissions? In my judgment, none of the above matters would on their own have led me to have concluded that the appeal should be allowed in circumstances where the husband had, by his own dishonesty, entirely created the situation he found himself in and where the judge had to do the best he could on the evidence available.[107]In his written closing submissions, Mr Glaser said that there was evidence in support of the letters being real accounts, namely:(i) the cost of the litigation with GA which had had a three-day hearing in the High Court on July 2020. The obvious answer, Mr Glaser said, was that the litigation had been funded by payment from the “blocked accounts” which would explain the reductions in funds in the accounts between June and November 2020; and(ii) the period of the husband being in possession of this substantial sum coincided with the husband’s offers made during the marriage to purchase an alternative property on Thurloe Square (see below) for £12.7m in cash.[108]There may be merit in those submissions but, once again, the problem is that neither of these pieces of evidence were put to the husband in cross-examination nor were the rest of the questions posed by the judge in his judgment, all of which would be relevant to a determination as to whether the accounts were genuine.[109]It is hard to do other than accept Ms Bangay’s submission that the case put to the husband in cross-examination was on a wholly different basis from that put in closing submissions. It was neither put to the husband that the accounts did exist (as the husband had said in his witness statements), nor that, far from being in a “blocked account”, the money was available to the husband to draw upon. In my judgment, disclosure of the second November 2020 letter was not needed in order for that essential case to have been put to the husband. The case being advanced in cross-examination was that the letters were a sham created by the husband and Mr Husain for the purpose of misleading the regulators and the Bank they contemplated buying. That case was entirely consistent with the fact that the primary issue in the trial (The First Issue) was as to the legitimacy of the FAP (and the ESOP which is not subject of the wife’s appeal). In his closing submissions to the judge, Mr Glaser submitted that it was more likely than not that real accounts existed and that the letters were inconsistent with there being “blocked accounts”. The alternative, he said, is “that these documents are shams” and he continued saying that the husband and Mr Husain’s witness statements “are a conspiracy to pervert the course of justice. This is damming collateral evidence regards the assertion around FAP.”[110]The question remains as to whether, notwithstanding the late change of direction regarding the case being advanced by the wife and the failure to put the new case to the husband, the husband’s litigation misconduct and frank perjury was sufficient to allow the judge to draw the inference that the money in the Disputed Accounts existed and belonged to the husband.[111]In Tui UK Ltd v Griffiths [2023] UKSC 48, Lord Hodge emphasised that the requirement that material points in dispute should be put to witnesses in cross-examination is fundamental to a fair trial. At [34] one of the three principal questions raised on that appeal was identified as:
“the scope of the rule, based on fairness, that a party should challenge by cross-examination evidence that it wishes to impugn in its submissions at the end of the trial?”
[112]Having quoted extensively from the seminal case of Browne v Dunn (1893) 6 Reports 67 on the necessity of putting a case in cross examination, Lord Hodge went on from [61] to consider the circumstances in which the rule may not apply, such as where the matter to which the challenge is directed is collateral or insignificant and fairness to the witness does not require there to be an opportunity to answer or explain. Another, he said, is where the evidence of fact is manifestly incredible and the opportunity to explain on cross-examination would make no difference.[113]Lord Hodge, in concluding, set out the following propositions at [70]:
“(i) The general rule in civil cases, as stated in Phipson, 20th ed, para 12-12, is that a party is required to challenge by cross-examination the evidence of any witness of the opposing party on a material point which he or she wishes to submit to the court should not be accepted. That rule extends to both witnesses as to fact and expert witnesses. (ii) In an adversarial system of justice, the purpose of the rule is to make sure that the trial is fair. (iii) The rationale of the rule, ie preserving the fairness of the trial, includes fairness to the party who has adduced the evidence of the impugned witness. (iv) Maintaining the fairness of the trial includes fairness to the witness whose evidence is being impugned, whether on the basis of dishonesty, inaccuracy or other inadequacy. An expert witness, in particular, may have a strong professional interest in maintaining his or her reputation from a challenge of inaccuracy or inadequacy as well as from a challenge to the expert’s honesty. (my emphasis) (v) Maintaining such fairness also includes enabling the judge to make a proper assessment of all the evidence to achieve justice in the cause. The rule is directed to the integrity of the court process itself. (vi) Cross-examination gives the witness the opportunity to explain or clarify his or her evidence. That opportunity is particularly important when the opposing party intends to accuse the witness of dishonesty, but there is no principled basis for confining the rule to cases of dishonesty. (vii) The rule should not be applied rigidly. It is not an inflexible rule and there is bound to be some relaxation of the rule, as the current edition of Phipson recognises in para 12.12 in sub-paragraphs which follow those which I have quoted in para 42 above. Its application depends upon the circumstances of the case as the criterion is the overall fairness of the trial. Thus, where it would be disproportionate to cross-examine at length or where, as in Chen v Ng, the trial judge has set a limit on the time for cross-examination, those circumstances would be relevant considerations in the court’s decision on the application of the rule. (viii) There are also circumstances in which the rule may not apply: see paras 61-68 above for examples of such circumstances.”
[114]In Re S (Care and Placement: Schedule of Findings of Fact) [2026] EWCA Civ 85, an appeal was allowed where a judge made a finding that a witness, “the aunt”, had administered a substance to a person in order to procure an abortion. The appeal was not resisted by the Local Authority. The allegation had not been particularised nor was it put to the aunt in cross examination. Cobb LJ (as he then was) said at [68] that Tui v Griffiths applies equally to family as civil cases. He went on to say that the aunt “should have been given the chance to give full answers to a particularised charge and/or to refute any accusation of dishonesty in this respect”. He went to say:
“68….The aunt was deprived of that chance, and the Judge was correspondingly denied the opportunity to make "a proper assessment" of this assertion "to achieve justice in the cause".”
[115]In my judgment there was a fundamental breach of fairness in this case in the failure to put to the husband that the Disputed Accounts represented personal assets held in his name and were available to him to draw upon. That breach of fairness is not in my view salvaged by the fact that it was suggested (although not specifically put) to Mr Husain that the money existed. On the contrary, my view is only reinforced by the fact that, when Ms Bangay sought a reconsideration of the finding upon receipt of the draft judgment on the basis that it was procedurally unfair, the judge said at [181] that “it must have been obvious to him when the letters emerged that W would say, “as she did in cross-examination of H on the first letter, that they set out the truth”. The judge was in error. It was never put to the husband that the first letter set out the truth.

The Wife’s Appeal: Belgrave Place/FAP

[116]The husband purchased the leasehold interest in Belgrave Place in 1999. The lease was set to expire in December 2017.[117]Belgrave Place was the family home during the marriage. The parties wanted to move as the flat was too small for the family. The judge detailed their attempted property purchases from 2017 to 2020. In July 2020, the husband made an offer of £12.7m cash to purchase a property in Thurloe Square in reliance on funds being made available by IIB. In the Family Law Act proceedings, contrary to the husband’s case, Recorder Allen KC held that(a) it was the husband’s serious intention to buy the property and(b) IIB declined to progress the purchase on the husband’s say-so because of the failure of the marriage and not because it was an unsuitable investment.[118]Whilst attempting to buy a larger property, the husband was at the same time also negotiating a lease extension with the landlord of Belgrave Place. At the end of 2018, the husband raised with IIB his need for funds to purchase the lease extension. It was formally raised as an item on the agenda for the IIB shareholders’ meeting on 17 January 2019. IIB resolved to pay the husband a ‘special bonus’ of £3,480,000 (EUR 4.25m) as soon as practicable.[119]The lease extension was duly acquired for c.£3m inclusive of costs using the money transferred by way of “special bonus”. The husband retained the excess from the bonus paid by IIB and used this to clear debts and to have a ‘float’. There were several conversations which took place in the following weeks between the husband and the board of IIB in which it was said that payment of a bonus that size could not be justified and therefore “variations on the theme of a loan were discussed”.[120]Ultimately, the solution of a Forward Acquisition of Property (FAP) was put forward. Put simply, this would provide for the husband to pay back the money to IIB with interest by a longstop date of February 2024. Failure to repay the loan would result in IIB, if it chose, selling the property, with the husband being responsible for the inevitable shortfall which would arise given that the property at £3m is worth significantly less than the sum outstanding, even before interest. It was said the creation of the FAP would have the benefit of preventing the IIB balance sheet from being adversely affected by the removal of funds from the company.[121]The husband asserted that the matrimonial home was owned by IIB as a result of the FAP executed between him and the Bank which he substantially owned. The wife’s case was that the FAP was a sham and that the husband should be treated as the outright beneficial owner of the property.[122]On 3 December 2021, the wife confirmed at a directions hearing that she maintained her challenge to the “validity and/or effect of the FAP”. The company was joined as a party for the purposes of the dispute in respect of the FAP (and the validity of the ESOP, a matter not relevant for the purposes of the appeal). Conventional directions were made for the filing of Points of Claim by the husband and the Bank in support of the Bank’s claim to have an interest in the former matrimonial home, together with an explanation as to why the same had not been registered at HMLR.[123]The pleadings record that the FAP agreement was executed by way of a deed on 1 April 2019. The history as set out described that the husband’s request for funds made in January 2019 was agreed to be made by way of a loan. IIB explained for their part that the husband’s finances were tight as he had invested all his capital in the bank and he was hoping that other investors would help him by providing funds for the lease. It was subsequently discovered, the husband said, that a loan would have triggered various anti-money laundering requirements which he may have been unable to satisfy. It was therefore resolved at a Board meeting on 29 January 2019 that the funds should be advanced as a bonus. On that basis the company remitted the equivalent of EUR 4m on 3 February 2019. The new lease was duly registered in the husband’s name on 3 March 2019.[124]The husband’s case was that further discussions were held with the shareholders. IIB puts it that Mr Husain turned to consider “how the transactions should be treated and recorded in the Company’s accounts”. The size of the bonus would have resulted in the Company’s equity being eroded by more than 50% which would have put the company in difficulty under Bahraini law absent significant capital injection by the other two shareholders.[125]Against this background, at a further meeting on 31 March 2019 it was decided to structure the finance as a forward acquisition of property (FAP) by the company. It did not occur to him, the husband said, that IIB’s interest should be registered.[126]In its Points of Claim, IIB makes reference to the audited accounts, in which a note refers to an “advance towards investment” (FAP). In 2020, the following year, the notes say that the advance towards investment paid in the previous year was “reclassified by the company during the financial year 2020”. This resulted in the advance towards investment (FAP) becoming invisible. No explanation was given of where or how the value was reclassified.[127]The wife’s Defence was that the FAP was a sham agreement disguising the true purpose which was to advance outright to the husband the sum which was in fact provided to him in accordance with the originally executed transaction in February 2019. In the alternative, if the FAP was genuine, the wife’s Defence was that the company would not exercise those rights against the husband.[128]In her Defence dated 28 March 2022, which responded to the husband’s Points of Claim dated 4 February 2022, in relation to the FAP, the wife specifically pleaded at (d) under “Issue one” that “the Company is and will continue to be a resource to H, which he is able to access at will.”[129]The final written account given by the husband in relation to the lease extension on Belgrave Place was in his section 25 statement of 19 September 2023. In that statement he said that he remained the legal owner, but that this was subject to the FAP financing agreement dated 3 February 2019, an agreement reached, he said, long before the marriage broke down. The husband said in terms that, given his inability to repay the money, in February 2024 the property would be sold to allow IIB to recoup some of the money due to them.[130]Having listened to the oral evidence and with some indication of the way the judicial wind was blowing, or as

the judge put it:

“[at the judge's] insistence and with a fair amount of judicial encouragement”, IIB made an offer of a settlement of property expressly couched “on the basis the FAP was valid”
. The offer would allow the wife and children to live in a property bought with the net proceeds of sale of Belgrave Place until A became 18 years old.[131]In the course of his submissions, Mr Glaser advanced that from the judge’s perspective it was an attractive offer as it guaranteed security of tenure for the wife and children as, absent a substantial lump sum payment to clear her litigation loan, a transfer of the property to her outright would have meant that the property represented “recovery in proceedings” and would be surrendered to her litigation funder.[132]Significant additional light was thrown on the FAP in oral evidence.[133]Mr Glaser pointed to the complex structure created to deal with the loan on the books of the Bank itself. In 2019, the FAP was visible in those accounts, but it became invisible in 2020/2021 (a non-consolidated third party was created, and the value of the receivable transferred to it, allowing the Bank to write off the loan over time as ‘bad’ and thereby disguise the fact that the ultimate debtor benefitting from the write off was the husband, a related party). This, Mr Glaser submitted, supported the reality as the wife had pleaded it – that the husband was never intending to pay, nor expecting to be called upon to repay, the loan advanced to him, nor was he expecting the Bank to complete on the purchase of the property. Quite the contrary, he had gone out of his way to create a structure that was capable of concealing the flow of outright benefit to him. This does not, Mr Glaser submits, find adequate reflection in the Judgment, which, at [54], saw this as simply an accounting treatment to avoid disclosing a related party debt:
“It was not a loan. It was a transfer of the beneficial interest with the legal interest to follow. The use of a FAP avoided the regulatory problems of a loan and the accountancy issues which arose from a bonus and because of its structure avoided having to declare it in the accounts as a loan to a connected person.”
[134]In my judgment the judge was in error in failing to go on to consider what light that might shine on the true nature of the arrangement between the husband and IIB.[135]Further, whilst the judge held that it was a genuine transaction, he also found that(i) it was never anticipated it would be enforced [56] (as has proved to be the case);(ii) the Board could agree to vary the longstop date and Mr Husain said he would likely be amenable to that [57]; and (iii), by the same token, interest could be waived [57].[136]The judge’s finding that it was likely that the longstop date would be varied turned out to be prophetic. One might have thought that, having not disclosed the two letters in relation to the Disputed Accounts, and having not produced the same until the later stages of the hearing following cross-examination, causing untold damage to the credibility of both Mr Husain and the husband, a repetition would have been avoided at any cost. Not so. Mr Richardson KC, on behalf of IIB, told the Court on the hearing of the appeals at the end of his submissions on Day 2 of the appeal following discussions as to whether IIB would still yet consider some sort of housing provision for the wife, that not only would IIB agree to a variation of the longstop date, but they had in fact done so and that there was a document to that effect. When asked whether this had been disclosed, he confirmed that it had not. At the Court’s direction the document was produced at 2.00pm on Day 2 before a somewhat disconcerted Mr Glaser began his submissions.[137]The document reads as follows:
“Amendment to the Forward Acquisition of Property Agreement (the FAP Agreement) dated 1 April 2029 (sic)”
Dated: 17 January 2024 (date in manuscript) It is hereby agreed between the Buyer and the Seller that the Longstop Date shall be extended until the sooner of five (5) years from 3rd February 2024 or six (6) months after the completion of the divorce settlement proceedings relating to Mr Sohail Sultan.[138]The document was signed by Mr Husain and the husband. I note that the date is after the conclusion of the first instance proceedings, but one would have thought that, given the nature of the Bank’s appeal and the precarious position the wife felt herself to be in, this extension to the longstop would have been disclosed to the court and the wife long before the second day of an appeal which had been in the list for months. I should emphasise that Mr Richardson is in no way responsible for the late production of this document.[139]The wife seeks permission to appeal out of time against the judge’s finding that the FAP was not a sham. She said that she would not seek to pursue the appeal unless either one of the husband’s or IIB’s appeal succeeded. In other words, if IIB succeeded and thereby were ‘released’ from an obligation to provide housing for the wife, or the husband succeeded in his appeal against the payment of a lump sum of £6m to the wife, she wished to appeal, but not otherwise.[140]On behalf of the husband, Mr Weale strenuously opposed the application for permission to appeal out of time. I intend to deal with this issue shortly. It is established law that such an application should be approached the same way as applications for extension of time under CPR 3.9 see Hysaj, R (on the application of) v SSHD [2014] EWCA Civ 1633 (Hysaj). Applying the Denton test as set out at [38] of Hysaj, much of the delay was as a result of the husband failing to honour the LSPO until the 11th hour, namely 1 July 2025, after which his appeal would have been dismissed without any further order. The wife’s application followed on 5 August 2025 and the skeleton argument is dated 29 August 2025. In any event, I have to evaluate, as the third limb of the test, “all the circumstances of the case, so as to enable the court to deal justly with the application”. I have no hesitation in granting permission to apply for permission to cross appeal out of time when considering all the circumstances.[141]The issue of the FAP, and in particular IIB’s appeal, is bound up inextricably with all the issues with which the Court has to grapple and it would be artificial for the Court to deprive itself of considering whether there is a real prospect of an appeal succeeding in respect of the allegation that the FAP was a sham in circumstances where the husband’s appeal, in part, seeks to rely on an admission by him and IIB that other documents generated by IIB are themselves a sham.[142]The wife appeals on two grounds: Ground 1: The judge erred in finding that the FAP was not a sham. The judge failed to engage with the evidence and/or provide adequate reasoning for rejecting the wife’s case. Ground 2: The Court fell into error in its decision regarding the FAP as a result of IIB’s position on the terms on which it was willing not to enforce the FAP. Ground 2 takes matters no further and permission to appeal is refused.[143]That then leaves ground 1, namely the failure to give adequate reasons. The judge’s reasons are condensed into six brief paragraphs of his judgment [52-57]. “52. It is W’s case that it was never the intention of the parties that the Company should have an interest in the property. 53. In the provision of information to the SJE, it was said on H’s behalf:
“The FAP was structured and put in place in order at the time to address a financing need of its principal shareholder – Sohail Sultan. It was to all intent and purposes a loan economically but was structured in the manner in which it was so as to optimize the accounting treatment and classified as an Advance Towards Investment”. 54. Although this might appear to support W’s case, I think this is a wrong interpretation. Although the economic effect of a FAP is very similar to a secured loan, it was not a loan. It was a transfer of the beneficial interest with the legal interest to follow. The use of a FAP avoided the regulatory problems of a loan and the accountancy issues which arose from a bonus and because of its structure avoided having to declare it in the accounts as a loan to a connected person. 55. I am not persuaded that the failure to register the FAP is significant. Mr Husain said that he was unaware that it could be registered. He trusted H and he deals with H on a daily basis. He regarded the likelihood of a sale having to be implemented as minimal. 56. I have been addressed at length as to the law relating to sham transactions. It is not necessary for me to set out the underlying principles and authorities, as I do not find it to be a sham. If I had so found it, I would not have been persuaded by Mr Richardson KC for the Company or Ms Bangay KC and Mr Weale for H that it failed on pleading points. But, I am satisfied that it was a genuine transaction, albeit one that was never anticipated would be required to be enforced. 57. Of course, in the future the Board could agree to vary the longstop date. Mr Husain said that if asked he would be likely to be amenable provided that the effect on the Company was neutral. If that is what H wished, I am satisfied that would be done. By the same token, interest could be waived. I do not believe that either Mr Husain or H wish to see W and the children homeless.”
[144]Mr Weale rightly emphasised that a prospective appellant in seeking to overturn a factual finding faces an uphill task (see Volpi)). This task, he says, is made all the more formidable insofar as the challenge is against a judge’s refusal to make a finding of dishonesty against not only the husband but IIB. Further, Mr Weale reminds the court that a judge cannot and does not need to deal with every point, especially in a case such as this where there are voluminous papers and numerous issues to be resolved.[145]In Simetra Global Assets Ltd v Ikon Finance Ltd [2019] EWCA Civ 1413, [2019] 4 WLR 112, Males LJ considered an appeal in a matter where it was said that the judgment failed to address many of the issues which arose at trial, that its conclusions were cursory and its reasoning limited, and that it had failed properly to analyse the witness and documentary evidence on a number of critical issues. From [39] onwards Males LJ reviewed the authorities relating to inadequacy of reasons. Whilst saying that no universal template is possible, he went on to make four points at [46]: “46. ...First, succinctness is as desirable in a judgment as it is in counsel's submissions, but short judgments must be careful judgments. Second, it is not necessary to deal expressly with every point, but a judge must say enough to show that care has been taken and that the evidence as a whole has been properly considered. Which points need to be dealt with and which can be omitted itself requires an exercise of judgment. Third, the best way to demonstrate the exercise of the necessary care is to make use of "the building blocks of the reasoned judicial process" by identifying the issues which need to be decided, marshalling (however briefly and without needing to recite every point) the evidence which bears on those issues, and giving reasons why the principally relevant evidence is either accepted or rejected as unreliable. Fourth, and in particular, fairness requires that a judge should deal with apparently compelling evidence, where it exists, which is contrary to the conclusion which he proposes to reach and explain why he does not accept it. 47. I would not go so far as to say that a judgment which fails to follow these requirements will necessarily be inadequately reasoned, but if these requirements are not followed the reasoning of the judgment will need to be particularly cogent if it is to satisfy the demands of justice. Otherwise there will be a risk that an appellate court will conclude that the judge has "plainly failed to take the evidence into account".[146]In my view the judge failed to consider the significance, if any, of a number of matters, including(i) the fact that the husband had accepted in evidence that he had executed sham documents and had been a party to a dishonest scheme in relation to the Disputed Accounts and in respect of which he had subsequently perjured himself in his dishonest witness statements,(ii) failed to consider whether the evidence of the accounting treatment of the FAP which would have resulted in the receivable (namely the FAP) being written off over time without impacting IIB’s accounts in the short to medium term after which no doubt the beneficial interest, if it ever had been transferred to IIB, would revert to the husband,(iii) failed to take into consideration that Mr Husain had been content to advance the money as a bonus until it became clear that Bahraini law would have required a top up of capital if such a sum was withdrawn from the Bank,(iv) failed to take into account that, on any view, the value of the house on sale would not cover the advance that had been made to the husband, and(v) found, but did not factor in his findings, that it was never anticipated that the FAP would be enforced, that the Board could agree, and that the company would be amenable to, the longstop date being varied, and that interest could be waived.[147]In my judgment, there must be a real risk that the judge, if only subliminally, was influenced by the offer of IIB. As he said himself at [57], “I do not believe that the husband or Mr Husain wished to see the wife and children homeless”. As Males LJ said:
“fairness requires that a judge should deal with apparently compelling evidence, where it exists, which is contrary to the conclusion which he proposes to reach and explain why he does not accept it”
. Even taking into account the merit in a succinct judgment and that, in a case as complex as this, the judge cannot possibly deal with each and every point, in my judgment the judge failed to consider all the relevant evidence which related to the question of the validity of the FAP and did not give sufficient reasons as to why the evidence was either irrelevant, accepted or rejected as unreliable.[148]It follows that not only is there is a real prospect of the wife succeeding on an appeal against the judge’s finding but that the appeal on Ground 1 must be allowed. The wife’s appeal therefore succeeds.[149]I agree that the appeals by the husband and wife should be allowed for the reasons given by King LJ. I have also had the benefit of reading Fraser LJ’s judgment below and agree that the Bank’s appeal should be allowed for the reasons he gives. With great regret, I agree that the matter should be remitted to be reheard by another judge of the Family Division.[150]I adopt the comprehensive summary of the facts from the judgment of King LJ above. I agree with her concerning both the husband’s appeal, and the appeal of the wife. I will add just a few comments of my own regarding that, given some of the submissions made by Mr Weale KC for the husband in reply, in respect of remedy, before turning to the Bank’s appeal. Mr Weale sought to persuade us that, if we were to allow the husband’s appeal on the grounds of a serious procedural irregularity, the correct course would be to unpick the findings of the judge that related to those issues only, and leave the remainder of his findings untouched, rather than order a re-trial. In order to substantiate that submission, he explained what he said would happen if such a serious procedural irregularity occurred on an appeal in a complex Commercial Court matter. He submitted that only those issues affected by the irregularity would be unwound by the appellate court, with the remainder left undisturbed.[151]Most regrettably, the outcome of these appeals is that a retrial is required. I find that outcome entirely dispiriting. I wish to emphasise that a retrial in this case is something that, given the costs incurred and time taken to date, ought to be avoided if at all possible. However, it cannot. I will briefly explain why I fundamentally disagree with Mr Weale’s submissions regarding remedy for two essential reasons.[152]The first reason is that the alleged serious procedural irregularity went to the heart of the evidence of the husband, whose credit was – unsurprisingly, particularly given his admitted perjury - being directly challenged on behalf of the wife. I do not see how Ground 1 of the husband’s appeal can succeed, yet only some of the first instance factual findings be overturned on appeal, with a significant number left undisturbed. The evidence of the husband was highly significant on most, if not all, of the major issues, and the credit of any witness is central in the exercise of any trial judge weighing up their evidence, balancing it against the evidence of other competing witnesses, here the wife, and deciding what to accept and what to reject. That exercise simply cannot be only partially unravelled in the way contended for by Mr Weale. Indeed, to do so would create another significant unfairness in my judgment, and that is unfairness to the wife. I make this observation with nothing but regret, but both the transcripts of the cross-examination and the judgment itself are confusing, fragmented and difficult to follow. Unpicking simply some factual findings and leaving others untouched is a recipe for disaster, and also unfairness.[153]Mr Weale’s analogy with a major Commercial Court trial does not assist him in any respect. Points such as those taken on this appeal are extremely rare in those cases. Pleadings are, to almost all intents and purposes in the Business and Property Courts, effectively replaced by the beginning of any trial (but particularly a lengthy one) by the very important List of Issues. This point was explained recently in Municipio De Mariana and others v(1) BHP Group (UK) Ltd(2) BHP Group Ltd[2026] EWCA Civ 502 at [121], although there is nothing new in that paragraph, which simply explains the existing practice in both the Commercial Court and the Technology and Construction Court, specialist King’s Bench courts within the Business and Property Courts. The importance of the List of Issues has been stressed in both the Commercial Court Guide, and the Technology and Construction Court Guide, for some years. The former describes the List of Common Ground and Issues as being required “at an early point in the case” at D.2.1(b) and is listed in the Guide as one of the key features of case management. That document is necessary for the first case management conference (“CMC”). The latter provides for the List of Issues to be provided early, and again for the first CMC. It is also stated at 14.4.2 of the latter that if there is a dispute with different formulations of the list of issues due to a dispute as to the pleaded case, that will be resolved at the Pre-Trial Review. If there had been a similar and agreed list of issues in this case, with counsel cross-examining by reference to it and closing submissions to the judge similarly ordered, such a scenario as unfolded here would have been far less likely to have happened.[154]The second, and even more compelling, reason is that the approach urged upon us by Mr Weale is contrary to high authority. In Serafin v Malkiewicz [2020] UKSC 23, the Supreme Court allowed an appeal from a case in which the Court of Appeal had done exactly what Mr Weale would have had this court do in this case. There had been serious procedural irregularity in the first-instance trial of a libel action, such that the Court of Appeal at [2017] EWCA Civ 852 had concluded at [95] that the trial judge had “not brought an entirely consistent approach to the question of the burden of proof”. There was also unfair judicial treatment. The Court of Appeal overturned the judge’s findings, in particular the refusal to award the claimant damages, even on a contingent basis, on the basis of serious procedural irregularity. They did however retain his conclusions on liability, but remitted the question of damages to be determined by another judge.[155]The Supreme Court held that this solution was wrong in principle. At [49] in the judgment of Lord Wilson he said this:
“[49] What order should flow from a conclusion that a trial was unfair? In logic the order has to be for a complete retrial. As Denning LJ said in the Jones case, cited in para 40 above, at p 67: “No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.”
Lord Reed observed during the hearing that a judgment which results from an unfair trial is written in water. An appellate court cannot seize even on parts of it and erect legal conclusions upon them.That is why, whatever its precise meaning, it is so hard to understand the Court of Appeal’s unexplained order that all issues of liability had, in one way or another, been concluded. Had the Court of Appeal first addressed the issue of whether the trial had been unfair, it would have been more likely to recognise that the only proper order was for a retrial. It is no doubt highly desirable that, prior to any retrial, the parties should seek to limit the issues. It is possible that, in the light of what has transpired in the litigation to date, the claimant will agree to narrow the ambit of his claim and/or that the defendants will agree to narrow the ambit of their defences. But that is a matter for them. Conscious of how the justice system has failed both sides, this court, with deep regret, must order a full retrial.” (emphasis added)[156]I fail to see how a trial could be unfair to the husband, which is effectively what his grounds of appeal advanced, yet still be fair overall, such that the husband retained the benefit of those findings by the trial judge that he prefers. I would describe this as worse than “island-hopping”; it is more akin to cherry-picking. In my judgment, as a matter of principle, if there has been a serious procedural irregularity that has materially impacted the fairness of a trial, the remedy for this is for that trial to be heard again. Here, these irregularities have impacted the cases advanced both for the wife, and also the husband. Her case concerning the FAP was not properly considered and adjudicated upon as my ladyship has explained; the husband’s explanations (such as they were) for the correct characterisation of the Disputed Accounts were not properly given either, and the case not properly put to him.[157]Finally on this point, it appears to be a growing trend in cases generally that unsuccessful parties, knowing how hard it is to overturn first instance findings of fact, attempt to appeal such findings by characterising what has led to those findings as procedurally irregular. Instead of appealing pursuant to CPR Part 52.21(3)(a) (that the decision of the lower court was “wrong”) appeals are increasingly mounted pursuant to CPR Part 52.21(3)(b) (that the decision of the lower court was “unjust because of a serious procedural or other irregularity”). No system is perfect and serious procedural irregularities do sometimes happen; that is why CPR Part 52.21(3)(b) exists. Hopefully, such occasions are likely to be rare; but if they do occur, a re-trial will usually be the only fair remedy.[158]I now turn to deal with the appeal by the second appellant (“the Bank”) against paragraph 10 of the order of Cohen J. IIB is an investment company in Bahrain, which carries out international banking business of different kinds. The husband is the majority shareholder and a director. I use the term simply “the Bank” for convenience. The Disputed Account considered by the judge was one held for the husband at, or by, the Bank. Paragraph 10 of the order states:
“10. The parties shall endeavour to agree the terms of the purchase of the replacement property in accordance with paragraphs 130 to 131 of the Judgment. In the event that the parties are unable to agree such terms, there be liberty to the parties to apply to the Court for adjudication on issues on which they disagree, but if the Respondent seeks permission to appeal this Order, such adjudication hearing shall take place only after (a) the Court of Appeal’s rejection of the Respondent’s application for permission to appeal or (b) the determination of his appeal if permission is granted.”
[159]The “replacement property” is in respect of the matrimonial home, in which the wife and children continue to live, which is in Belgrave Place in London. The Bank and the husband entered into the arrangement described in the judgment below as a "Forward Acquisition of Property" ("FAP"). This was a means adopted by the Bank and the husband to provide some framework for the sum of approximately £3.5m that the husband had received from the Bank. He had used this sum to buy a lease extension on the matrimonial home and clear various debts (judgment [34] – [51]). Although it was not explained in this way, the property at Belgrave Place appears to have been provided to the Bank as de facto security against this indebtedness.[160]The Bank’s ground of appeal is that the court had no jurisdiction pursuant to the Matrimonial Causes Act 1973, or indeed otherwise, to include the provisions at paragraph 10 of the Order. Permission to appeal was granted by Moylan LJ on 28 June 2024. Given these paragraphs of the judgment are referred to in paragraph 10, I shall set these out again here for convenience. “[130] At my instance and with a fair amount of judicial encouragement, Mr Husain agreed that IIB would be prepared to assist W in her desire to live in a house in Fulham by the purchase of a house in the name of the Company for the occupation of W and the children, provided that the total sum made available to W did not exceed the net proceeds of sale of Belgrave Place, with a small amount of the proceeds being retained by IIB. The amount had plainly not been considered by Mr Husain but eventually after several further thoughts he offered on behalf of the company to make available to W a housing fund of £2m plus SDLT. [131] This was on the basis that the FAP was declared valid; that W would give vacant possession of Belgrave Place and the injunction and notice be lifted; the balance of the proceeds of sale (if any) should revert to the Company; and that the lease or licence to occupy would expire upon the end of Ayah’s tertiary education. There would be provision for H to purchase the property from IIB at market value at any time.”[161]The factual development of this paragraph of the order that the Bank seeks to challenge on its appeal are as follows. During the trial, Mr Husain, both a director of the Bank and, at the time, its Chief Financial Officer, gave evidence before the judge. It should be remembered that it was the Bank who claimed full beneficial ownership of the matrimonial home, having acquired that interest by virtue of the so-called FAP dated 1 April 2019, which I explain in further detail below. This document was framed as a quasi-sale agreement, whereby the husband sought to sell the matrimonial home to the Bank on what is termed in the FAP the “Effective Date”, in exchange for what is referred to as the Purchase Price. In fact, the sums that represented the Purchase Price had originally been paid to the husband some time earlier as a bonus by the Bank, that being confirmed in Board Minutes dated 29 January 2019. It was later “reclassified” by both the Bank and the husband as a loan to him, rather than as it was originally, namely a bonus as part of his remuneration. The sum was explained as having been advanced to him by the Bank under the terms of the FAP, even though that agreement post-dated the payment to him. The payment to the husband and its role in the FAP is dealt with below where I consider some of the terms of the FAP.[162]It is not necessary to reproduce the whole of the terms of the FAP. The husband is referred to as the Seller, and the Bank as the Buyer. King LJ has already referred to some in summary, including when explaining the emergence on the second day of the appeal of the document said to extend the longstop date. Some of the terms of the FAP are conveniently reproduced or summarised here: i) The Effective Date is said to be 3 February 2019. However, the date of the agreement is 1 April 2019. This means that the parties were agreed that something had happened in the past – namely a “sale” of the property – even though it had not. This may just be a curiosity, but it merits mention. ii) Completion has the conventional meaning of transfer of the property to the Bank. iii) Encumbrance means “any interest of equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation, security, interest, title, retention or any other security agreement or arrangement.” iv) Longstop Date means a date falling five years after the Effective Date “or any other date as may be agreed by the Buyer and the Seller in writing.” v) The Longstop Date has been extended again and is now either the sooner of 3 February 2029 or 6 months after completion of the divorce proceedings. The document that is said to effect this extension is dated 17 January 2024 and was produced during the hearing. We have seen no board minutes or any other documents that demonstrate how or when the Bank decided to do this, or why, nor have any been disclosed. vi) The Purchase Price is 4.25 million Euros and Repayment is explained as “repayment of the Purchase Price plus interest to be paid by the [husband] to [the Bank] in accordance with clause 3.1”. vii) By clause 2, the husband agreed “to sell and transfer title to” the property. He warranted in clause 7.1.1 that he was the sole legal and beneficial owner. He also warranted in clause 7.1.4 that the property “was free from all Encumbrances”. viii) Clause 3.1 made completion subject to and conditional upon the husband failing to repay to the Bank the purchase price and interest “on or before the Longstop Date”. By clause 3.2, if the husband paid an amount equal to the repayment as defined “prior to the Longstop Date…this agreement shall automatically terminate with immediate effect at 6.00pm on the Repayment Date”.[163]The written evidence submitted to the judge was that the payment was denominated in euros because the subsidiary of the Bank in the Bahamas was the one with the necessary liquidity to make that payment. It was also said that the sum was advanced to the husband in two amounts, the substantial one to an account the husband held in the Isle of Man, and 250,000 euros to an account he had in Bahrain. The husband said in an email to his wife dated 29 April 2019 that “I just borrowed the money for the lease” in an extract at [31] in the judgment. By “for the lease” he meant a payment to the Grosvenor Estate for a lease extension to increase the term of years and so lead to a long leasehold. The reason the FAP was adopted as the mechanism to do this is explained at [36] to [41] of the judgment, that latter paragraph explaining that the FAP was drafted by Mr Husain himself. This mechanism is said to have been adopted for a range of reasons, including reporting and regulatory ones.[164]As King LJ has explained, it was the case of the wife that the FAP was a sham transaction. The “reclassification” of the previously-paid bonus as a loan was one of the matters upon which she relied in relation to this issue. The judge’s findings on this point, and the numerous others, which she deployed in seeking to demonstrate the FAP was a sham transaction are wholly deficient in terms of analysis of the evidence and explanation.[165]Were the husband not to repay the debt by the so-called Longstop Date, the Bank would acquire legal title and, if it so chose, could then sell the property in order to realise sufficient funds to satisfy his unpaid debt. Were the husband to satisfy the debt by repaying the Bank in which he holds the majority shareholding that scenario would never arise. The husband’s evidence – and indeed his case on his appeal – is that he has no funds at all. In the earlier proceedings before this court which led to the so-called Hadkinson order being made against him in relation to a sum of £120,000 payable to the wife under a legal services payment order (the decision being at [2025] EWCA Civ 468), the husband claimed he had no financial resources at all. This is dealt with at [22] to [24] of that judgment. If that were genuinely the case, then he would be unable to repay the sum due under the FAP. (Incidentally, he would also have been unable to pay the £120,000, even though he did so). It would therefore have been inconsistent for him to repay the loan to the Bank, whilst claiming not to have any money.[166]Further, he has continued in his role at the Bank throughout the period leading up to the hearing of the appeal before us. His function there is said to be so central that leading counsel for the Bank, Mr Richardson KC, submitted at the appeal that were he to be made bankrupt by the wife (a possibility adverted to by the husband’s counsel during her submissions on his appeal, to try to bolster his case on the Disputed Account) the effect on the Bank’s operations would be so detrimental that it would be forced to close down. It is perhaps unnecessary, in the context of the Bank’s appeal, to consider the obvious inconsistency of such a successful international banker, so central to the Bank’s operations, having no financial resources at all.[167]Returning to the proceedings which led to the order under appeal, the judge appears to have taken the view that the Bank would not wish to have the wife of their majority shareholder, together with the two children of the family (one of whom is disabled) rendered homeless. He therefore explored this with Mr Husain during the latter’s evidence, including the possibility of the Bank providing alternative accommodation for the wife costing less than the amount that the matrimonial home would realise were it to be sold. I consider that the judge fell into error in doing so.[168]During the course of his evidence, with what the judge described as "[the judge's] insistence and with a fair amount of judicial encouragement", Mr Husain agreed to buy a replacement house in Fulham in the name of the Bank for the wife and children to live in, with a purchase price of up to £2 million plus stamp duty, providing that that sum did not exceed the proceeds of sale of the then-current matrimonial home. The actual evidence was as follows, concerning a potential extension to the Longstop Date:
“A: Mr Sultan has not approached us yet – Q: He hasn’t approached you? A: - on what he wants to do with the longstop date. Q: He hasn’t approached you? A: No. Q: In the entire time of this divorce he hasn’t said, please, IIB, don’t kick my wife and kids out of the property, please extend the longstop date. He hasn’t asked you? A: No, he has continued to say that he is going to make the payment. Now that the company has been dragged into this Court case, we’ve seen a lot more – Q: I’m just, so he hasn’t, in the last, I mean this divorce has now been going on for some considerable time, and he hasn’t once approached the bank and said, come on guys, I don’t think I’m going to be able to make the payment, can you extend the longstop date? A: He has – Q: He’s continued to tell you that he’s going to do it? A: Yes. He has not asked for the longstop date to be changed; he’s not asked for the – Q: It’s a different question. A : - loan to be restructured.”
Q: He hasn’t approached you? Q: He hasn’t approached you? A: He has – Q: He’s continued to tell you that he’s going to do it? A : - loan to be restructured.”

Q: He’s continued to tell you that he’s going to do it?

[169]The judge then embarked upon a number of questions covering broadly the same ground, including the way in which the Bank would go about dealing with a request from its majority shareholder for restructuring, and also what the Bank’s position would be in respect of providing a family home for the wife and children to live. This led to what then followed. Leading counsel for the Bank informed the judge as follows:
“Mr Richardson: Having taken instructions over the short adjournment, the bank’s basic position is as follows: On the basis of the FAP’s validity, it would be agreeable to the husband – ….. Judge: On the basis that the FAP is valid, yes? Mr Richardson: It is agreeable firstly to the husband having conducted the sale of the London flat at the bank’s direction, with his agreement to transfer the net proceeds to it. That’s simply to avoid, if you like, completion to it, which would bear an unnecessary stamp duty charge. Judge: Sorry, say that last bit again. Mr Richardson: That the – rather than the bank, if you like, requiring completion for the husband in February, which would incur a stamp duty charge, it proposed, if you like, he retains legal titles to the property and sells it under the bank’s direction, and then the net proceeds flow to the bank. That obviously requires the current injunction and notice against title that the wife has at the Land Registry to be removed. Judge: Hang on. Yes? Mr Richardson: The bank is then amenable to the acquisition by it of a new property in London worth up to £1.5 million inclusive of stamp duty and cost of acquisition, over which the bank would then grant a licence or lease for occupation to the wife up to 2032. That being, obviously, one year after 2031, because at that point, 2031, the proceeds of Trevor Square will flow through the bank and to the husband and Your Lordship will recall the current equity in Trevor Square, that essentially the bank has on its books is about £1.5 million that, if you like, were offering to investing a new property in London. When those proceeds of Trevor Square, if nothing else, come back to Mr Akbar, flow through the bank and go to the husband, the bank will then require the husband to use those proceeds to buy the new property for the wife off of it. Judge: Sorry, the bank would require him to use the proceeds to- Mr Richardson: Off of Trevor Square to buy from it the equivalent value property that it has acquired in London for Ms Faraj. And then obviously – it’s – and that- Judge: Sorry, do you mean to buy property which has already been purchased? Mr Richardson: It has been purchased by the bank, exactly. Judge: Buy the substitute property? Mr Richardson: The bank is then bought out of the property in which the wife is living. So Ms Faraj’s home is then taken off of the bank’s hands to her and then it’s obviously a matter for Your Lordship and for Mr Sultan and Ms Faraj what the arrangement then is between them in relation to that property.”
(emphasis added)[170]What then transpired was during closing submissions the matter came up again. This led to the following exchanges between the judge and Mr Richardson. “Judge: ….that is why I need to know what Ms Bangay [for the husband] and Mr Richardson’s fallback position is….. ….Court resumes. Mr Richardson: My Lord, I’ve taken instructions with- Judge: Yes Mr Richardson: -[Ms Jones?] as you requested. The – I’ve now taken up the parents’ position as follows on the basis of the FAP [being valid?], and also on the basis- Judge: Sorry, on the basis – I am just trying to make a – keep a note, on the basis of the FAP [being?]- Mr Richardson: FAP [being?], valid- Judge: -the valid- Mr Richardon: - and obviously the basis that the wife will agree to give vacant possession voluntarily come a relevant date next year, the bank is able to indicate in principle as follows. The property needs to be sold at the bank’s direction with the current injunction and notice against title being removed- Judge: Sorry, you are going too fast. Mr Richardson: I’m so sorry, My Lord, the property is to be sold at the bank’s direction with the current injunction and notice against title which Ms Faraj has registered against it being used, the bank will then agree to finance a new property in London owned by it for up to £2 million and will pay the Stamp Duty on top of that which will come to somewhere between another £150,000/£250,000 depending on how it’s structured. The balance of the proceeds such as they are, are to come back to the bank, and the bank will then grant a licence or lease, precise terms to be discussed, to Ms Faraj to occupy the property until [A] reaches 18 or finishes her first degree at university Judge: Okay, right until [A] a finishes tertiary education- Mr Richardson: So, oh, until she put tertiary education- Judge: Yes. Mr Richardson: I should make clear the bank doesn’t as it were wish to hold the property as an investment long-term and [inaudible] will be looking to Mr Sultan to repurchase it from – repurchase it from it on – and will other arrangements then appropriate once he is able to do so. Judge: Thank you. Mr Richardson: Thank you, My Lord. Judge: That is very helpful. Will I accept that solution or not, I hope, it is at least some comfort to the wife to know that she and the children are going – actually going to have somewhere to live even though I know it is not what she wants, and likely to Mr Glaser is going to continue to address me. Mr Richardson: Indeed, My Lord.” (emphasis added) Mr Richardson: My Lord, I’ve taken instructions with- Mr Richardson: FAP [being?], valid- Mr Richardson: So, oh, until she put tertiary education- Mr Richardson: Indeed, My Lord.”

Mr Richardson: So, oh, until she put tertiary education-

[171]Before us, Mr Richardson submitted that this latter offer was in principle only, and was not an offer capable of acceptance. Whether that is right or not in contractual terms regarding the first “offer” during Mr Husain’s evidence, or even the second offer (if it were a different offer from the first one) neither offer was accepted. The second exchange with the judge, set out above, expressly used the term “in principle” in any event. That was followed by a counter-offer from the wife’s solicitors which came in writing from her solicitors and introduced new terms. It is trite law that making a counter-offer has the same effect as rejection of an offer. This means that the original offer lapses, such that it is no longer capable of acceptance. It is not therefore necessary to consider and decide whether the offer Mr Richardson said he was making on instructions on behalf of the Bank was capable of acceptance.[172]However, whether these were genuine offers or not made on behalf of the Bank, the wife's solicitors and the solicitors for the Bank were unable to reach terms which would have enabled this proposal to be put into effect. At the hearing of this appeal, we were shown emails passing between the wife’s legal advisers and the Bank in the period after the hearing and before the judgment was handed down. This showed a great deal of disagreement between them about the potential terms that might otherwise have been agreed. Some of these might be termed of lesser importance; some were fairly fundamental, such as who would benefit from any increase in capital value of the replacement home between then and the youngest child attaining the age of 18.[173]At the Consequentials Hearing on 15 December 2023, the judge having heard submissions, ordered at paragraph 10 that the parties "endeavour to agree the terms of the purchase of the replacement property" and that "in the event that the parties are unable to agree such terms, there be liberty to the parties to apply to the Court for adjudication on issues on which they disagree". That order also included at paragraph 12 an undertaking by the wife to remove the restriction on title that had been earlier imposed by the court on the Belgrave Square property.[174]The Bank’s position is simple, although it was explained by two or three different routes. It is simply that there is no jurisdiction for the court to impose such an order upon it.[175]Regardless of the thought processes that led to the judge including paragraph 10 in the order, in my judgment he fell into error. He seems both to have envisaged and expected that the Bank wished to become constructively involved in participating in a consensual solution whereby the wife, and the two children of the family (the youngest of whom will become 18 years of age in 2032), were adequately housed and did not become homeless. He would also have been aware of the very important statutory duty upon the court as a result of section 25 of the Matrimonial Causes Act 1973, although he did not refer to it. That section states, inter alia:
“25. Matters to which court is to have regard in deciding how to exercise its powers under ss. 23, 24, 24A, 24B and 24E. (1) It shall be the duty of the court in deciding whether to exercise its powers under section 23, 24, 24A, 24B or 24E above and, if so, in what manner, to have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family who has not attained the age of eighteen. (2) As regards the exercise of the powers of the court under section 23(1)(a), (b) or (c), 24, 24A, 24B or 24E above in relation to a party to the marriage, the court shall in particular have regard to the following matters— (a) the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire; (b) the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future…..”
(emphasis added)[176]The first consideration, which applies to this court as much as it does to the court below, is to the welfare of the minor child. It must have appeared to the judge that this consideration was also something to which Mr Husain, the director and CFO of the Bank, and also the Bank itself, were having some regard. If so, that appears not to have remained the case, if it ever were the case, but that is not to criticise Mr Husain. There is no legal duty upon the Bank in these circumstances to provide housing for the wife and children, strong though any moral duty on the part of the Bank’s majority shareholder, the husband, might appear. That the Bank was not prepared to assume such a legal duty is obvious.[177]However, regardless of that, in my judgment the judge fell into significant legal error in a number of ways. i) It was quite wrong for the judge to attempt to broker some sort of solution with the director of the Bank in the way that he did, and during his cross-examination. These were contested financial remedy proceedings involving three parties. It is obviously preferable for matters to be resolved by agreement rather than by contested dispute, but by the time of the hearing before the judge, litigation had been underway for three years. The role of the judge was to decide the issues on the evidence, not attempt to persuade any party into an offer of some sort. ii) Given the circumstances, Mr Husain may even have felt he had no choice other than to agree with the judge. Although the judge himself described this as “a fair amount of judicial encouragement”, it may be that Mr Husain felt under pressure in some way. iii) Regardless of that, both the husband and Mr Husain were having their credibility challenged by leading counsel for the wife. The wife may well have had some difficulty, in those circumstances, in understanding why the judge may have appeared to take Mr Husain’s statement of intentions at face value. iv) Having taken instructions, Mr Richardson for the Bank sought to explain what he described as an offer “in principle”. Even if the judge were correct to have explored the matter as he did – and I am clear that he was not – he should, at that point, have done two things. Firstly, required any “offer” to be reduced to writing. It is wholly unsatisfactory for the position of the Bank, if it were relevant at all to the issue of how the welfare of the children was to be protected, to be orally dictated to the court in the way it was, with the risk of ambiguity inherent in that. Even the transcript of the exchanges is not clear on all the words used. Accommodation for the wife and children is a vitally important matter in any divorce. It simply cannot be dealt with in this vague fashion. Secondly, the judge should have confirmed with Mr Richardson whether the offer was made with an intention to create legal relations and one that was capable of acceptance. If it had been, he could have adjourned for a short time to enable to parties to see if final agreement could be reached. If so, this should have been distilled into a consent order. If it were not, then that would provide its own answer, and he should have continued to resolve the issues extant in the case. In those circumstances, the offer would only be relevant after he had decided the substantive issues, and when he came to consider costs.[178]The judge then compounded his errors following distribution of the draft judgment. The parties, in their attempts at securing some sort of agreement that related to the very important issues of accommodation for the wife but particularly for the two children, including the minor child in respect of whom the statutory “first consideration” arises, could not reach agreement. Mr Richardson asked for a short adjournment at the Consequentials Hearing so that discussions between them all could take place. The judge refused this, and gave a short judgment on the Consequentials Hearing. In that judgment, he stated at [5]: “Mr Richardson KC, on behalf of the company, says: my clients have made an offer, and it has been refused by the wife; she has made a counteroffer. The bank have refused that and therefore there is nothing on which the court can bite”.[179]In my judgment, Mr Richarson’s submissions on this were correct. The judge however went on to make the order that he did containing paragraph 10. It also contained paragraph 11, which was an undertaking by the Bank, and paragraph 12, an undertaking by the wife to lift her restriction on title, which it can be seen from Mr Richardson’s submissions above was a pre-condition for the Bank. This undertaking by the wife was in effect contingent upon paragraph 10 bearing fruit and leading to a concluded agreement. This is because lifting the restriction on title would allow the property to be sold. It cannot be sold with that restriction in place.[180]The judge does not appear to have considered in the judgment itself a central and very important feature of this scenario. An agreement to agree is, in law, no agreement at all, and certainly not one that is legally enforceable. The judge did deal with the housing needs of the children by making provision for a payment to the wife of £2.2 million within his calculation of the sum he awarded her. There does not appear to have been much consideration of how that could be impacted by the final resolution of any agreement that the Bank and the wife might in the event eventually reach.[181]The other important point that impacts upon the whole of the exercise that the judge was undertaking is the Bank made it clear that any offer it was making was “on the basis that the FAP was valid”, in other words, that the wife’s case on it being a sham were to fail. In places, the transcript reads almost like a negotiation between the Bank and the judge. Given the judge did then go on to find the FAP was valid, there are obvious issues about the administration of justice.[182]I do not entirely agree with Mr Richardson’s submissions relating to the judge’s jurisdiction. He plainly had jurisdiction to make an order in respect of the house, although I accept that whether that is what he did in paragraph 10 is open to significant debate. Section 24A of the MCA 1973 enables the court to “make a further order for the sale of such property as may be specified in the order, being property in which or in the proceeds of sale of which either or both of the parties to the marriage has or have a beneficial interest, either in possession or reversion” where it makes an order under sections 22ZA, 23 or 24 MCA 1973. The purpose of an order under section 24 is to make effective an order under one of those sections in respect of a property when those conditions are satisfied. This point was not fully argued before us because the real issue is whether such jurisdiction as the judge did have, extended to ordering the Bank to attempt to agree terms with the wife. I consider it clearly did not. Further and in any event, given the issue of which of the parties has, or have, any beneficial interest in the house is to be retried, it is unnecessary to consider this further.[183]Even if he did have jurisdiction in theoretical terms – and one can well imagine an alternative scenario where parties such as these may be agreed on heads of terms, but are a few weeks apart, for example, on details such as upon what the date completion should take place – then as soon as one of the parties withdrew from the co-operative process, that party simply cannot be ordered to continue towards an agreement. That withdrawal occurred before the Consequentials Hearing, as Mr Richardson explained to the judge and as recorded at [5] in the Consequentials Judgment. Even if it did not occur then (and I am clear that it did) it certainly occurred when the Bank lodged its notice of appeal.[184]Mr Glaser KC for the wife has sought permission to appeal the findings that the FAP was a sham. To be fair to the wife, she only sought this if the Bank’s appeal succeeded. It was submitted by Mr Glaser that the condition in the offer from the Bank “on the basis the FAP was valid” was, as he put it in terms, “effectively a plea bargain”. He submitted in the skeleton seeking permission to appeal:
“It obviously placed the court in an unusual position to be met with an attractive offer conditional upon it not making findings it has been tasked with determining on the evidence. It was an attractive offer as it guaranteed security of tenure for the Wife: transfer of the property to her outright would mean the property represented recovery in proceedings that would be owed to her litigation funder. The Court was obviously acutely alive to this issue.”
[185]I know of no principle of law whereby any party to litigation can barter with a judge on what findings of fact the court might or should make in exchange for anything at all. It is the duty of any judge to make relevant findings of fact on the evidence, and apply the law as they consider it to be. I consider what occurred is the judge misunderstood – which given the circumstances of the “offer” might be understandable – the intentions of the Bank. He genuinely appears, in so far as it is relevant, to have believed that Mr Husain and the Bank wanted to provide alternative housing for the wife and children. He was wholly mistaken in that understanding, but he should not have allowed what he thought the Bank might or might not want to do in the future to seep into his determination of the evidence in any respect.[186]Mr Glaser also sought to characterise the offer by the bank as a concession, and submitted that the concession was that the Bank “might be made subject to a settlement of property”. I do not accept that it can be so characterised. There is no basis for construing the agreement between the Bank and the wife (or the wife and husband) as a nuptial settlement, such that the court has the ability to vary it under section 24(1)(c) MCA 1973. There was no agreement at all. Nor do I accept Mr Glaser’s other submissions, including that the appeal by the Bank is premature. He submits that the court has power to implement an agreement where the parties cannot agree on all the terms, and he also relied upon construing a contract in the event of doubt or where the parties cannot agree on what all the terms mean, drawing an analogy with the dicta in G v B [2016] EWCA Civ 161 at [11], where the issue under consideration was construing a consent order. He maintains that the judge was giving the parties the opportunity to reach agreement on the settlement of property in favour of a party to the marriage.[187]I disagree with that analysis. As I have explained above, there was no concluded agreement in relation to any settlement of property. There was no agreement, properly so-called, in respect of anything. Because I do not characterise what the Bank did as making a concession, the authorities regarding resiling from a concession such as BT Pensions Scheme Trustees Ltd v BT plc[2011] EWHC 2071 (Ch) are not relevant.[188]Mr Glaser does have some points of some substance in respect of the Bank’s appeal. Firstly, he submitted that the actions of the Bank in this respect are being influenced by the motivations of the husband. The husband does, after all, own most of it, and Mr Husain is his close colleague. The husband is so important to the Bank’s operations that – given the doomsday scenario outlined by Mr Richardson – were he no longer to be involved, the Bank would have to cease operation. There has been no evidence at all on how certain important matters have occurred, for example the further extension of the Longstop Date to 2029. Mr Richardson made submissions about the Bank’s decisions being made without the husband’s involvement but submissions are not evidence. Secondly, he points to a whole raft of different elements which are relevant to whether or not the FAP were a sham, which he submits have simply not been addressed in the judgment. They have been dealt with above by King LJ in her judgment on the wife’s appeal.[189]Given the lack of agreement between the Bank and the wife, and all that transpired, it follows that I would allow the Bank’s appeal. However, paragraph 10 cannot simply be excised from the order, which is what the Bank seeks. It stands with the undertaking in paragraph 12 given by the wife, and most importantly the welfare considerations of the minor child. This court has a statutory obligation to have r3egard to these under section 25, which makes it the “first consideration”. The judge below considered that the process of the Bank and the wife seeking to agree the arrangements to which I have already referred would lead to accommodation for the wife and children. Given that the paragraph of the order which sought to do that is to be removed as a result of the appeal, the court must address that important question.[190]The only just route in the strange and highly unfortunate combination of circumstances on all three appeals – those of the husband, the wife and the Bank – is for all of the appeals to be allowed and the matter to be tried afresh.[191]In conclusion therefore, I agree with the judgment of King LJ that the appeals by both the husband and the wife are allowed. I would also allow the Bank’s appeal. If my ladyship and my lordship were to agree with me, this matter will have to be remitted to another High Court Judge to deal with. One of the important issues will be whether the FAP is a sham (which follows from the success of the wife’s appeal), and another is the issue of residential provision for the wife and her children. Inherent in both of those issues is the status of the property in terms of both legal and beneficial ownership. In those circumstances, the current restriction on the title of the property must remain until those issues are properly determined in a re-hearing.

Cited in 1 later judgment