Augousti v Matharu  EWHC 1900 (Fam)10 August 2023
Published: 04/09/2023 23:16
Mostyn J. Decision on permission to appeal on grounds which were considered to be totally without merit and applications for reporting restriction order.
H advanced 21 grounds of appeal and made an application to adduce fresh evidence in respect of a judgment by HHJ Evans-Gordon in financial remedy proceedings from April 2023.
The appeal raised the following issues:
- The test that the court should apply on an application to introduce further evidence after the case concludes but judgment has been reserved.
- The scope and extent of the court’s discretion when exercising the ‘needs’ principle.
- The test to be applied on an application to adduce fresh evidence in an appeal under FPR 30.12(2)(b).
- The degree of likelihood necessary to satisfy the criterion of ‘a real prospect of success’ of a proposed appeal and how improbable an appeal has to be to be considered ‘totally without merit’.
The parties were aged 33, and had a relationship for 5–7 years. The parties shared the care of the two children of the marriage, aged 7 and 3. The W works full time earning £56k gross pa and the H works part time earning £800 pm. The only asset in the case was the W’s 3% shareholding in a company whose main business is hotels, which is owned principally by her father and uncle. It was agreed that the W’s share was non-matrimonial, given it was received by her prior to the parties’ relationship.
Since separation, H had accumulated large personal and corporate liabilities and his business was in insolvent administration.
HHJ Evans-Gordon found that the W’s shares could not be sold or charged without the consent of the W’s father and uncle. While the shares were valued at £20.9m on a pro rata basis, as W was not a director, a discount of 75% should be applied. The judge found that it was ‘unlikely in the extreme’ that the W’s family would agree to sell at that or any significant discount. HHJ Evans-Gordon also recorded that the W had received dividends in only three out of 13 years of ownership and rejected the H’s argument that the court should extrapolate from those receipts that the W was entitled to £876,500 pa in dividends going forwards. The judge also found that it was a case in which there was virtually no liquidity.
Twice immediately prior to the judge handing down judgment, H applied to introduce new evidence back-tracking on the extent of his and his companies’ liabilities. The judge admitted and considered the evidence in the first application, but it made no difference to her judgment. On the second, she read the evidence but excluded it as being ‘of no assistance’.
The court found that ‘any significant award made to the H is likely to go to his creditors’. In terms of needs, the judge recorded that the parties had never owned their own home, they lived in small, rented dwellings, in expensive areas, which they funded from their income during the marriage.
Mostyn J commented that HHJ Evans-Gordon had painstakingly explained why an order requiring a property to be purchased for H’s occupation with the children during their minority was the appropriate solution and justified with ‘the utmost care’ the appropriate level of housing. The judge ordered W to fund the H’s share of childcare for three years to enable him to work. She found the level of maintenance awarded was all the W could afford and discharged the arrears under the LSPO and MPS orders on the basis that the W did not have the funds to pay them.
The judge adjourned arguments about costs – the total costs incurred were £974,707.
The grounds of appeal
Mostyn J grouped the H’s 21 grounds of appeal into the following four categories:
- Appeals against case management decisions (including that the judge was wrong not to admit H’s late witness statement and not to stay the proceedings or delay the handing down of judgment).
- Appeals against findings of fact (including that the judge was wrong to find that any significant sum awarded to H would go to creditors, that the maintenance was all W could afford, the judge placed insufficient weight on routes to resources available to the W other than her family purchasing shares).
- Appeals against discretionary/evaluative decisions (including that the judge was wrong not to make provision for H’s liabilities or order a pension share, the judge was wrong to make an order that housed H and the children in a property owned by the W’s family who were not parties to the proceedings, that the assessment of needs was outside of the bracket of reasonable outcomes given the standard of living).
- Appeals against procedural decisions (including that the judge was wrong not to make a school fees order, wrong not to make an order that attached to any dividends received by W in the future and wrong to discharge the LSPO/MPS arrears).
Mostyn J considered the authorities from the Supreme Court on the differing standards to be applied depending on what the appeal asserts (Re B (a Child)  UKSC 33).
Mostyn J reviewed the authorities on permission to appeal, noting Peter Jackson LJ’s judgment in Re R (A Child)  2 FLR 1033, that the degree of likelihood of success does not need to be 51% but the minimum degree of likelihood required is not defined. Mostyn J repeats the view he expressed in AO v LA  EWHC 83 (Fam) that a degree of likelihood of at least 25% would normally be needed to satisfy the ‘real prospect of success’ test.
Appeals against case management decisions
In respect of the H’s appeals against case management decisions, Mostyn J found that the H was out of time for filing an appeal notice (noting the seven-day period for appealing case management decisions) and that the appellate standard is heightened on appeals against case management and is ‘very close to a Wednesbury standard of review’. Mostyn J reiterated the overriding objective and stated that at the PTR there must be ‘the most careful examination of the time estimate’, and that if a case does go part-heard, there must be very strict terms applied. Mostyn J found that the H had attempted to use the delay in the handing down of judgment to attempt to adduce evidence to reverse his own case on the enormous liabilities he faced as he had seen the direction the case was likely to take.
Mostyn J found that in financial remedy cases the test for adducing fresh evidence should be that set out in Ladd v Marshall  1 WLR 1489, regardless of whether that application is after completion of evidence but before submissions, after final submissions but before judgment, after judgment but before the order is perfected or on appeal against the perfected judgment. The test should be applied with progressively increasing rigour relative to the point in time the application is made.
Mostyn J declared that the appeals against case management decisions were totally without merit.
Findings of fact
In respect of the appeals against findings of fact, Mostyn J found the H’s argument that the judge was wrong to find that it was likely that any significant award would go to his creditors was totally without merit. The other grounds were against findings of primary fact, so the H had to show a realistic prospect of showing that there was no evidence to support it or it was based on a misunderstanding or it was a finding no reasonable judge could have reached. Mostyn J found that HHJ Evans-Gordon examined the extensive evidence extremely carefully and assessed the H’s chances of overturning those facts were bordering on zero; those grounds were also totally without merit.
Appeals against discretionary/evaluative decisions
The H asserted the judge’s decisions on the needs claim were riddled with factual errors as well as being wrong in their evaluative or discretionary expressions. Mostyn J considered the ethical, moral or logical basis for huge awards, in particular when capital is sought to purchase a property to meet the housing need of the recipient while the children still need accommodation when that award then meets the recipient’s housing need for periods well after the children are grown up. Mostyn J considered that compensation for relationship generated disadvantage can be considered within the needs principle.
Mostyn J found HHJ Evans-Gordon’s findings to be ‘impregnable’, but even if the judge had made the findings sought by the H, this was a relatively short marriage and the H was young and had an abundant earning capacity such that the same award would be justifiable as a matter of logic and equity.
Appeals against procedural decisions
Mostyn J found all of these grounds of appeal to also be totally without merit.
Permission to appeal was therefore refused on all grounds and the application declared to be totally without merit, as well as the application to adduce fresh evidence.
Reporting restriction order
Following judgment, both parties applied for a reporting restriction order. The H requested modest redactions to protect highly sensitive confidential information, which Mostyn J granted. The W sought for the entire judgment to be suppressed as she believed her elder child might read about it and be distressed. Mostyn J found that argument to be misconceived as it would apply in every case where there are children mature enough to read the judgment. Mostyn J considered the view of Peel J in Tsvetkov v Khayrova  EWFC 130 and reiterated his own interpretation of Scott v Scott  AC 417. He repeated the view that the decision in Lykiardopulo v Lykiardopulo  EWCA Civ 1315 does not provide a lawful basis for a practice inconsistent with Scott and s 12 of the Administration of Justice Act 1960.