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Estimate of spouse's undisclosed wealth is not needed for financial order, rules EWCA

Thursday, 22 August, 2019

The England and Wales Court of Appeal (EWCA) has rejected a husband's appeal against a financial remedy order, lodged on the grounds that the first instance court did not try to estimate the scale of his alleged undisclosed wealth.

The appellant, Mr Moher, is a businessman who owned and ran a goods importing company while his wife looked after their three children. In the divorce, his wife sought a lump sum of GBP1.5 million, while Moher offered GBP960,000. Wallwork HHJ, essentially accepted the wife's case that what the husband had disclosed represented a significant undervalue of the true extent of his assets and income. Wallwork rejected the husband's case that he had provided the court with a true picture of his finances and his current difficulties, and ordered him to pay his ex-wife a fixed GBP1.4 million lump sum, plus maintenance of GBP22,000 a year, plus GBP52,000 costs. He did not explain how he had calculated this award.

In his appeal against this order, Moher submitted that the judge had failed to undertake the 'twin pillars' of any financial remedy judgment: namely, an evaluation of the parties' resources and a reasoned explanation for his award. Since it was not possible to ascertain why the judge made the award, it was argued that the order must be set aside and a rehearing held.

Moher cited Mostyn J's judgment in NG v SG (2012 1 FLR 1211), to the effect that 'if the court concludes that funds have been hidden then it should attempt a realistic and reasonable quantification of those funds, even in the broadest terms'. Wallwork had not done this, and, according to Moher, his failure to attempt any quantification of the undisclosed assets or the scale of the husband's future income vitiated his award.

However, the EWCA disagreed. In its judgment, Moylan LJ noted that Wallwork knew the case law in respect of non-disclosure, and in particular he was aware of Mostyn's dictum that the court should attempt to evaluate the extent of the assets in endeavouring to achieve a fair outcome. Despite this, because the wife had put her case on a needs rather than a sharing basis, Wallwork decided he did not need to identify the undisclosed assets with the precision that might otherwise have been necessary.

'I do not accept that a judge is required to provide a figure for, or a bracket of, the financial resources in every case even when confronted by non-disclosure', said Moylan. 'It depends on the specific issues raised in the case and, critically, on the evidence…The judge must have decided that he could not undertake this exercise in this case because the extent of the husband's non-disclosure disabled him from doing so...Further, the judge specifically considered whether the husband would have sufficient resources to meet his own needs…[and] was entitled to conclude that there were sufficient resources both to meet the wife's needs at the level of the proposed award and to meet the husband's needs.'

Accordingly, the EWCA decided the omission of an estimate did not fatally undermine the judgment such that the case should be remitted for a rehearing, and dismissed Moher's appeal (Moher v Moher, 2019 EWCA Civ 1482).

Sources