The Incorporated Trustees of Great Calling Ministries Worldwide v (1) A Irabor (2) F Irabor [2024] EWHC 803 (Fam)11 April 2024

Published: 09/05/2024 15:28

Sir Jonathan Cohen. Appeal by an intervener against a final order which included discharging an interim charging order on the FMH made in the intervenor’s favour and a payment of a lump sum which would prevent the recovery of the monies the intervenor alleged were owed to them.


The intervener, a church which had provided significant loans to the H and of which the H was a founder, appealed the final order in financial remedy proceedings which provided for the H to pay a lump sum of £750,000 to the W in addition to the W’s costs of the preliminary issue hearing and 50% of the W’s other costs. The judge also discharged an interim charging order made in favour of the intervener on the FMH.

The parties were married in 2008 and have four children. The church was established in 2013. In December 2013, the H was offered a substantial loan from the church to move to England and escape the threats of a militant organisation in Nigeria. Approximately $1.56m was transferred to the H and used to purchase the FMH in the H’s sole name. The H then borrowed a further $220,000 from the church to complete the purchase of a second property. Within days of the completion of the second property, the parties separated.

In June 2017, the first loan became due for repayment. In November 2017, the parties were divorced in Nigeria, shortly after which, the church requested a restriction on the charges register of the FMH. Less than a week later, the church sued the H in the Nigerian courts for the monies owed. Settlement was reached very quickly and judgment entered in the Nigerian court for the sum lent. The W was not a party to those proceedings.

The church was given leave to intervene and the issue for the court to determine was whether the church had a beneficial interest in either of the two properties. After a four-day hearing, HHJ Mitchell handed down judgment finding that the legal and beneficial ownership remained with the H and that each loan could only be described as ‘the softest loan with in reality there being no expectation that H could manage repayments of the scale needed’.

As soon as that judgment was received, the church applied to register the Nigerian judgment in the High Court and an interim charging order was later made.

The assets

There was equity in the FMH of c.£1.176m and in the second property of £372k. The amount owed to the church was said to be £1.274m. There were no other assets of significance and the W had debts of £110k.

By the trial, W was living in a three-bedroom council house and was reliant on benefits while completing a course of further education. H continued to live in the FMH.

The parties’ positions

The W sought a lump sum of £750,000 and her costs of the proceedings.

The H’s offer was that the W should receive the proceeds of sale of the second property (i.e. £372k). But if the court took the view that the W and the children required a larger sum, then the church would accept an additional sum being paid to the W by way of a Mesher type order, where it would revert when the youngest child turned 18.

The judgment

In his judgment, the judge held himself bound by the decision of HHJ Mitchell and described the application for a charging order as ‘opportunistic’. The judge distinguished the authorities on the basis that the court had found that the intervenor would not take steps that would prejudice H’s financial position. In the alternative, the judge found that this case was exceptional and the legitimate needs of the W and the children required access to the equity in the FMH. The judge considered s 1(5) Charging Orders Act 1979 and found that the intervenor could not be considered a ‘bona fide judgment creditor’.

The appeal

The submissions in support of the appeal were in three categories:

  1. Res judicata/estoppel. In summary, was the judge bound by the findings of HHJ Mitchell that the debts were soft or should he have revisited the debts, in particular in light of the attempt by the church to enforce; were HHJ Mitchell’s findings res judicata or should the judge have looked at the matter afresh as if the issue had not already been determined;
  2. The W’s needs. The appellant’s criticisms of the judge were as follows: the judge used a bracket of £525–675k without any more precision; of W’s debt, £59k related to her student loan with no explanation as to why this debt could not be left as a liability; it appeared the judge had double counted W’s costs by including them as a liability and also making a costs order and the judge allowed for a ‘Besterman cushion’ without explanation;
  3. The balancing exercise. The appellant asserts that the judge did not carry out the balancing act between the rights of the creditor and the needs of the W.

In respect of the res judicata issue, Sir Jonathan Cohen regarded this argument as ‘sterile’. While the judge appeared to feel that the issues were determined by HHJ Mitchell, it was evident that he reached his conclusion on the facts and matters as they appeared to him.

The judge had distinguished the case from Austin-Fell and Harman on the basis that the judge had found the church would not require repayment of its loans for the foreseeable future, which was confirmed by the church’s position that it was content for H to retain possession of the FMH with a sale only taking place in a further 11 years. Further, no interest or occupation rent was being paid by the H and it would be erroneous to compare the church to a mortgagee or other commercial lender.

Sir Jonathan Cohen agreed that this was an exceptional case.

The evidence given on behalf of the church was by a Mr O who had next to no knowledge of the functioning of the church and was unable to give any helpful information about its finances. The basis on which the church was able to provide such sums of money was unclear. The placing of a restriction against the FMH was found by HHJ Mitchell to be done as a collaborative act with H’s help and assistance.

The church had failed to comply with discovery orders made in the preliminary issue proceedings. The judge was deeply unimpressed with H’s disclosure, describing H as being unwilling to provide any particulars of his movements, income and means and the judge drew the clear impression of H having access to funds as and when required from various undisclosed assets.

The judge did not provide a breakdown of the £750k, but it was clear that it comprised: (a) housing fund; (b) the sum W needed to pay her costs; (c) clearance of her student loan and (d) Besterman cushion.

Given the ages of the four children and that they were of different genders, it was not unreasonable that each should have their own bedroom. The judge was plainly entitled to prefer W’s particulars, with range of £525k to £625k, to the ‘meagre’ homes put forward by the H.

Sir Jonathan Cohen did not accept that the judge was wrong in principle to allow W £60k to clear her student loan and other debt. It is within the proper discretion of the judge to conclude that a student loan should be cleared. In particular, the judge was right to assess W’s needs generously. This was a case where H had access to undisclosed funds and the sole use of a five-bedroomed house in London and had managed to buy a new car for £45k.

However, in making orders for costs in addition the lump sum, the judge had double counted. This was readily accepted by the W’s counsel and the W undertook not to enforce any order for costs made to date.

Sir Jonathan Cohen found that the Mesher argument was not raised before the court below and it was therefore hard to be critical of the judge for not considering a matter that was never put to him.

The church argued that the result leaves it with no means of recovering its loan. That is not the case, the church will receive £370k from the second property and the balance of £420k from the FMH, which goes a long way to repaying the church.

H’s needs are met as he has the use of the remaining funds loaned by the church which have been found not to be the subject of a reclaim to his prejudice. The H has not filed a notice of appeal of the final order.

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