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Faraj v Ahmad & Anor

Smart Summary

Summary of Court of Appeal Judgment

Factual and Procedural Background

The proceedings concerned financial remedy litigation between the Respondent and the First Appellant following the dissolution of their marriage. The Second Appellant, Company A, an investment holding company in Bahrain of which the First Appellant was majority shareholder and a director, was joined in relation to the validity of a Forward Acquisition Property agreement ("FAP") concerning the former matrimonial home in London ("the Property").

The First Appellant and Company A each appealed discrete aspects of the first-instance order made by Judge Cohen on 28 November 2023. The First Appellant challenged a lump-sum award to the Respondent of approximately £6.08m, grounded on the judge's finding that the First Appellant had access to c.£16m in certain disputed ("Disputed Accounts"). Company A appealed an order (paragraph 10 of the consequential order) by which the judge required the parties to endeavour to agree terms for Company A to provide housing for the Respondent and children, with the court to determine terms if agreement could not be reached.

The Respondent applied for an extension of time and permission to appeal against the judge's finding that the FAP was not a sham. The Court of Appeal (Judges King, Baker and Fraser) granted the Respondent an extension and permission to appeal. The First Appellant's application to adduce fresh evidence was refused. Each of the three appeals was allowed and the matter remitted for a full re-hearing by a different judge.

Legal Issues Presented

  1. Whether the first-instance trial was procedurally unfair in relation to findings that funds in the Disputed Accounts belonged to the First Appellant, such that those findings should be set aside.
  2. Whether the judge was entitled to treat the FAP as a genuine transaction rather than a sham (and whether there was adequate reasoning to support that conclusion).
  3. Whether the Family Court had jurisdiction under the Matrimonial Causes Act 1973, or otherwise, to make an order (paragraph 10) requiring Company A to endeavour to agree terms for provision of housing for the Respondent and children and, if necessary, for the court to adjudicate disputed terms.
  4. Whether permission should be given to the Respondent to appeal out of time against the FAP finding.

Arguments of the Parties

First Appellant's Arguments

  • Ground 1: The finding that the First Appellant had a secret bank account containing c.£16m was procedurally unfair because the Respondent did not plead or sufficiently particularise that case early and changed tack late in closing, thereby ambushing the First Appellant and denying fair opportunity to meet the case in cross-examination.
  • Ground 2: In any event, the factual finding was plainly wrong and unsupported by proper evidence.
  • Applied for permission to adduce fresh evidence on appeal to show the accounts never existed; argued Ladd v Marshall criteria were met.

Respondent's Arguments

  • Maintained that the First Appellant had undisclosed assets and access to Company A's resources; adverse inferences were properly open to the judge under authorities on non-disclosure and computation (Moher and related authorities).
  • Sought permission to appeal out of time on the FAP question and argued there was a real prospect of success given defects in the judge's reasoning.

Second Appellant (Company A) Arguments

  • Contended the court had no jurisdiction under the Matrimonial Causes Act 1973 or otherwise to make paragraph 10 of the consequential order requiring Company A to endeavour to agree housing terms or to be subject to court adjudication of such terms.
  • Submitted that any offers made in the course of evidence were not binding and that the court should not be put in a position of enforcing an agreement-to-agree; any oral ‘encouragement’ did not create enforceable obligations.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Volpi & another v Volpi [2022] EWCA Civ 464, [2022] 4 W.L.R. 48 Reluctance of appellate courts to dislodge findings of fact made after trial by an experienced judge. Cited as the established caution in overturning trial findings; Court emphasised those passages when considering whether to disturb Judge Cohen's findings but nonetheless allowed the appeals.
Piglowska v Piglowski [1999] 1 WLR 1360 Authority on appellate review of findings of fact. Referred to in the context of deference to first-instance findings.
Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5, [2014] FSR 29 Appellate principles regarding fact-finding and evaluation of evidence. Used as part of the court's framework for assessing whether to dislodge findings.
Re A (No.2) (Children: Findings of Fact) [2019] EWCA Civ 1947; [2020] 1 FCR 313; [2020] 1 FLR 755 Guidance on appellate intervention in findings of fact in family cases. Referred to when assessing threshold for upsetting findings reached after trial.
Moher v Moher [2019] EWCA Civ 1482; [2020] 1 FLR 225 Approach to non-disclosure: court may draw adverse inferences and need not always quantify undisclosed resources; computation and inference principles. Cited as central authority for how judges deal with non-disclosure and adverse inferences; informed the Court's conclusions on whether pleadings were required and how inferences may be drawn.
TL v ML and Others (Ancillary Relief: Claim against Assets of Extended Family) [2005] EWHC 2860 (Fam), [2006] 1 FLR 1263 Procedure for disputes between spouse and third parties: joinder, pleading, separate witness statements and preliminary issue hearings. Court considered TL v ML but held its procedural prescription was not applicable to the Disputed Accounts issue in this case; noted it had been followed for the FAP dispute.
J-PC v J-AF [1955] P 215, [1955] 2 WLR 973 Earlier authority on inferences from gaps in disclosure; when a party leaves a gap the court need not draw inferences favourable to that party. Referred to in discussion of the court's power to draw adverse inferences from non-disclosure.
Prest v Petrodel Resources Ltd [2013] UKSC 34, 2 AC 415, [2013] 2 FLR 732 Principles concerning inferences, inherent probabilities and use of available material in financial proceedings. Cited for the proposition that courts may draw inferences from the available material and inherent probabilities.
OG v AG [2020] EWFC 52 Scenarios where conduct arises in financial remedy cases; distinction between litigation misconduct (usually costs) and conduct affecting distribution. Used to explain that litigation misconduct is usually reflected in costs and only in rare cases impacts distribution; influenced the Court's view that pleadings are not always required for non-disclosure.
TT v CDS [2020] EWCA Civ 1215, [2021] 1 FLR 996 Confirmed that litigation misconduct can be taken into account under s25(2)(g), but generally is reflected in costs. Cited to support the Court's view that formal pleadings are not always necessary where the issue is litigation misconduct/non-disclosure to be addressed by costs or inference.
M v M [prior authority cited in TT v CDS] Example of 'add-back' where dissipation of assets required adjustment to computation. Referenced as an example where conduct affected distribution due to clear financial consequences.
H v H (Financial Relief: Attempted Murder as Conduct) [2005] EWHC 2911 (Fam), [2006] 1 FLR 990 Extreme personal conduct may meet high threshold under s25(2)(g) and affect distribution. Discussed as context for the 'glass' analogy and for the high threshold required for conduct to affect distribution.
Tsvetkov v Khayrova [2023] EWFC 130, [2024] 4 WLR 59 Procedure: conduct must be pleaded; stages for proving conduct and linking to financial impact; case management expectations. Quoted for the procedural approach recommended where conduct issues arise late and for requiring pleading where conduct is advanced.
Goddard-Watts v Goddard-Watts [2023] EWCA Civ 115, [2023] 4 WLR 20 Approach to conduct and how it may be considered in the s25 exercise; caution about claiming financial consequence absent clear link. Relied upon in discussion of whether behaviour not pleaded as s25(2)(g) can nevertheless be treated as relevant in assessing other factors.
Moore/other authorities on cross-examination and fair trial such as Browne v Dunn (1893) 6 Reports 67; Tui UK Ltd v Griffiths [2023] UKSC 48 Requirement to put material points to witnesses in cross-examination to preserve fairness; exceptions where rule may be relaxed. Cited by the Court in concluding there was unfairness because the essential case that the Disputed Accounts represented personal, available assets was not put to the First Appellant in cross-examination.
Re S (Care and Placement: Schedule of Findings of Fact) [2026] EWCA Civ 85 Applies Tui v Griffiths to family cases; importance of putting allegations to witness and particularising charges of dishonesty. Used to reinforce the need for particularisation and cross-examination where allegations of dishonesty arise; supported the conclusion of procedural unfairness.
Simetra Global Assets Ltd v Ikon Finance Ltd [2019] EWCA Civ 1413, [2019] 4 WLR 112 Requirements for adequate reasons in judgment; building blocks of reasoned judicial process. Applied in assessing whether Judge Cohen gave adequate reasons on the FAP issue; Court found insufficient analysis on key points.
Ladd v Marshall [authoritative reference] Test for admitting fresh evidence on appeal. Cited in assessing and ultimately refusing the First Appellant's application to adduce fresh evidence (evidence was available at trial).
Hadkinson-related decision Ahmad & Anor v Faraj [2025] EWCA Civ 468 Context: enforcement of a provision to secure payment of a legal services payment order (procedural history). Referred to in the factual background concerning prior procedural orders and enforcement against the First Appellant.
Three Rivers District Council v Bank of England (No.3) [2001] UKHL 16 Fairness considerations in use of material from inquiries or documents not tested in adversarial process. Invoked by First Appellant's counsel in argument about fairness and ambush; Court considered but distinguished the circumstances.
Hysaj R (on the application of) v SSHD [2014] EWCA Civ 1633; Denton principles applied via Hysaj Approach to extension of time applications and procedural discretion. Applied in deciding to grant the Respondent an extension of time to seek permission to cross-appeal.
Municipio De Mariana and others v (1) BHP Group (UK) Ltd (2) BHP Group Ltd [2026] EWCA Civ 502 Practice in Commercial Court: use of Lists of Issues and early identification of issues to avoid procedural surprises. Referred to by Lord Justice Fraser in rejecting argument that only some factual findings should be unraveled; contrasted commercial case management practices.
Serafin v Malkiewicz [2020] UKSC 23 Remedy for unfair trial: principle that serious procedural irregularity usually requires a complete retrial; appellate court cannot pick and choose parts of an unfair judgment to uphold. Applied by Lord Justice Fraser to justify ordering a full retrial rather than attempting partial unwinding of first-instance findings.
G v B [2016] EWCA Civ 161 Authority on construing consent orders (referred to in argument about construing agreements/consents). Invoked by Respondent's counsel in submissions about the court's ability to implement agreements; Court did not accept that a binding agreement existed here.
BT Pensions Scheme Trustees Ltd v BT plc [2011] EWHC 2071 (Ch) Law regarding resiling from concessions (referenced in argument). Cited in submissions but Court did not accept the judge had been presented with a binding concession by Company A.

Court's Reasoning and Analysis

The Court undertook a structured analysis addressing (i) the First Appellant's challenge to the finding about the Disputed Accounts; (ii) the Respondent's prospective appeal concerning the FAP; and (iii) Company A's challenge to paragraph 10 of the consequential order.

On the Disputed Accounts and procedural fairness

  • The Court accepted established authorities permitting adverse inferences for non-disclosure (Moher and related authorities) but stressed that such matters are often addressed by cost orders and that pleadings under s25(2)(g) are not always required where the issue is litigation misconduct/non-disclosure emerging during trial.
  • The Court applied the fairness rule on cross-examination (Tui UK Ltd v Griffiths and Browne v Dunn). It concluded there was a fundamental breach of fairness because the core case ultimately adopted by the Respondent at closing—that the Disputed Accounts were genuine accounts containing funds available for the First Appellant's use—was not put to the First Appellant in cross-examination. That omission deprived the First Appellant of a proper opportunity to answer the case and deprived the judge of the ability to assess the evidence fairly on that specific, pivotal point.
  • The Court found that the First Appellant's admitted perjury and the discovery of the letters were relevant but did not cure the breach of fairness created by failure to put the accounts-as-available-assets case to him in cross-examination. Consequently, the finding that the First Appellant had c.£16m available could not stand.
  • The First Appellant's application to adduce fresh evidence on appeal was refused because the evidence sought to be introduced was available at trial and did not meet the Ladd v Marshall criteria.

On the FAP (Respondent's appeal)

  • The Court held that the judge's reasons for rejecting the Respondent's sham case were insufficient. The judge did not adequately analyse or explain why he accepted the FAP as genuine in the face of evidence that arguably supported the sham/benefit-to-husband case (including accounting treatment, reclassification, and the improbability of enforcement).
  • The Court emphasised authorities on adequate reasons (Simetra) and the need to address apparently compelling contrary evidence; it concluded there was a real prospect the Respondent would succeed on appeal on the FAP issue.
  • The Respondent was granted permission to appeal out of time, the Court noting the interdependence of issues and fairness considerations.

On Company A's appeal (paragraph 10 and jurisdiction)

  • The Court concluded the judge erred in the way he explored, elicited and treated what Company A characterised as in-principle offers during evidence and closing. The judge should not have brokered or encouraged what appeared to be an agreement with Company A's director without written terms and without considering whether the matter was an enforceable agreement or an unenforceable agreement-to-agree.
  • The Court found significant legal error in attempting to require Company A to "endeavour to agree" terms and in recording contingent undertakings tied to that process, especially given Company A's express position that any assistance was conditional on the FAP being valid. The Court held that the Family Court did not have power to compel a third party to engage in continued agreement negotiations as the order contemplated.
  • Given the interrelationship of the FAP, the housing proposals and the judge's fact-finding, the Court determined that Company A's appeal should succeed, but that the overall just outcome was to remit the whole matter for rehearing rather than to excise paragraph 10 in isolation.

Remedy and final assessment

  • Applying authority (Serafin), the Court concluded that where there has been a serious procedural irregularity affecting the fairness of a trial, the only appropriate remedy in this complex case was a complete retrial before a different Family Division judge. Partial unwinding of select findings was rejected as unfair and unworkable given the centrality of the First Appellant's credibility and the interlocking issues.
  • Accordingly, all three appeals (First Appellant, Respondent's permission to appeal out of time on the FAP, and Company A) were allowed and the matter remitted for a full re-hearing. The Court ordered that the existing restriction on title to the Property remain in place pending re-determination.

Holding and Implications

CORE RULING: ALL APPEALS ALLOWED; MATTER REMITTED FOR A FULL RE-HEARING

Direct consequences and implications:

  • The Court of Appeal allowed the appeals by the First Appellant, the Respondent (granting extension and permission to appeal out of time on the FAP), and Company A. All relevant first-instance findings implicated by the appeals cannot stand and the case must be tried afresh by another Family Division judge.
  • The First Appellant's application to adduce fresh evidence on appeal was refused (Ladd v Marshall criteria not satisfied).
  • Company A's challenge to paragraph 10 of the consequential order succeeded; the Court found error in the judge's handling of in-court proposals and his attempt to bind or direct Company A to negotiate terms. However, because the remittal covers the whole dispute, the Court did not simply expunge paragraph 10 in isolation but ordered a re-hearing where these issues must be redetermined.
  • The Respondent was granted an extension of time and permission to appeal in relation to the FAP finding; there is a real prospect she may succeed on that point at re-hearing.
  • The existing restriction on title to the Property is to remain in force pending the rehearing.
  • No new binding precedent was established beyond the application of existing authorities; the judgment applies established principles on non-disclosure, conduct, the proper approach to pleading and case management, the duty to put material points in cross-examination, and the remedial principle that serious procedural unfairness ordinarily requires a full retrial.
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Faraj v Ahmad & Anor

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Faraj v Ahmad & Anor
(Jul 24, 2026)