The Court of Appeal has set aside a financial remedy order in a divorce between a wealthy couple, finding that it was necessary for the case to be reheard.

The couple had begun a relationship in Bahrain in 2011. They had moved to England in January 2013 and had married in Bahrain three months later. They had a daughter in 2014: the wife also cared for a daughter from a previous relationship who was severely autistic. The couple's relationship had become strained in 2020 and the wife had petitioned for divorce in October that year.

At a financial remedy hearing, the High Court found that the husband had access to bank accounts containing £16 million. The Court rejected the wife's assertion that a loan agreement relating to the former matrimonial home, made between the husband and an investment company in Bahrain of which he was a director and the majority shareholder, was a sham. Had it been, the husband would have retained ownership of the property, making it susceptible to a property transfer order. After what the Court described as some 'judicial encouragement', the company offered, on the basis that the loan agreement was valid, to sell the property and use the proceeds to buy a property in which the wife and children could live until the younger daughter turned 18. The Court ordered the husband to pay the wife a lump sum of £6.08 million, less the proceeds from the sale of a property in Portugal. The husband, the wife and the company all appealed to the Court of Appeal.

The husband appealed against the financial remedy order on the basis that the High Court had been wrong to find that he had £16 million in the accounts. Allowing his appeal, the Court of Appeal considered that there had been a fundamental breach of fairness in that it had never been put to him that the accounts represented personal assets held in his name and were available to him to draw upon. Whilst he had been dishonest in his evidence relating to the accounts, the case put to him in cross-examination had been that the evidence showing they belonged to him was a sham created by him and his co-director for the purpose of misleading the company's regulators and a bank it was contemplating buying.

The wife's appeal also succeeded. In deciding that the loan agreement was not a sham, the High Court had failed to consider a number of matters, including the husband's dishonesty regarding the accounts, the fact that the sale of the former matrimonial home would not cover the amount of the loan, and the fact that it had never been anticipated that the agreement would be enforced. There was also a risk that the decision had been influenced by the offer the company had made during the hearing.

The company's appeal was also allowed. It had been quite wrong for the High Court to attempt to broker some sort of solution with the company's co-director in the way that it had, while he was being cross-examined. The role of the Court had been to decide the issues on the evidence, not attempt to persuade any party into an offer of some sort.

The Court of Appeal concluded that the only just route in the strange and highly unfortunate combination of circumstances was for all of the appeals to be allowed and the case to be remitted to the High Court and tried afresh.