(Court of Appeal, Macur LJ, Sir Bernard Rix, 22 May 2015)
[The judicially approved judgment and accompanying headnote has now published in Family Law Reports  1 FLR 473]
Financial remedies – Application to set aside order – Non-disclosure – Husband had illegally obtained information from the wife’s computer – Whether the judge had been entitled to dismiss the application
The full judgment is available below.
The husband's appeal from a decision refusing his application to set aside a financial order based upon illegally obtained materials was refused.
The husband and wife were married for 7 years and had one child together who following separation lived with the wife. In financial remedy proceedings the judge made orders transferring property to the wife, providing for payment of a lump sum and periodical payments in respect of the wife and child. The wife received 54%of the assets on the basis that a small departure from equality was justified by need.
The husband applied to set aside the order on the basis on information he had illegally obtained from the wife's computer. The application to adjourn the proceedings to enable him to file evidence of the contents of the electronic files was refused. The application to set aside the order was dismissed. The husband appealed.
The appeals were dismissed. There could be no viable support for an argument to the effect that the judicial evaluation of the evidence or the subsequent exercise of discretion had been perverse. The departure from equality was justified due to the wife's needs generously interpreted in terms of accommodation requirements. The judge had adequately assessed the fairness of the case on needs rather than equality. He had been entitled to exercise his discretion in the manner he did and provided sufficient reasoning for doing so.
The dismissal of the set aside application was justified given the manner in which the materials had been obtained, the husband's persistent failure to candidly describe the means utilised to do so, the wife's subsequent disclosure, the lack or minimal relevance to the issues in the case as well as the delay and costs. The judge had conducted a conscientious inquiry into the facts and the law on the subject and could not be accused of peremptorily disposing of the case. The decision had fallen within the reasonable band of discretion afforded to him.
Case No: B6/2014/0037 AND B6/2014/0038
Neutral Citation Number:  EWCA Civ 542
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM PRINCIPAL REGISTRY OF THE FAMILY DIVISION
HHJ HOROWITZ QCFD12D00759
Royal Courts of Justice
Date: Friday 22nd May 2015
LADY JUSTICE MACUR DBE
SIR BERNARD RIX
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(Transcript of the Handed Down Judgment ofWordWave International LimitedA Merrill Communications Company165 Fleet Street, London EC4A 2DYTel No: 020 7404 1400, Fax No: 020 7831 8838Official Shorthand Writers to the Court)
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Mr J Hall (instructed by Dominic Levent Solicitors) for the Appellant
Mr Bruce Blair QC and Mr M Brunsdon Tully (instructed by Howard Kennedy LLP) for the Respondent
Hearing dates : 21 April 2015
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Lady Justice Macur DBE :
 These two appeals arise from financial remedy proceedings conducted by HHJ Horowitz QC in May and December 2013. Both involve an attack upon the exercise of the judge’s discretion. One appeal challenges the division of assets made following judgment delivered in September 2013; the other the procedure adopted in a subsequent hearing at which the appellant husband (“the husband”) sought directions in his application to set aside the financial order on the basis of the alleged material non disclosure by the respondent wife (“the wife”), and the wife’s application for summary dismissal of that claim.
 The parties began their relationship in 2002, married in June 2005 and their only child, A, was born on 4 October 2008. Decree nisi was pronounced on 5 September 2012. A’s main residence was to be with her mother. The husband is a French national and works in the financial sector. The wife is English and has not worked since 2008.
 The husband was found to have earned and to have the potential to earn significant income and to have a “substantial mortgage capacity”, assessed to be £496 – 500,000. The wife was found to be emotionally fragile and had no earning capacity in the short term and would be limited to modestly paid part-time work until A commenced secondary school.
 The judge appeared to accept that the total value of the matrimonial assets was in the region of £1,066,000, excluding the husband’s small pension pot. He made transfer of property, lump sum and periodical payments orders to the wife and for the benefit of A. That is, he ordered in favour of the wife the transfer of the former matrimonial home which had an equity of about £91,000; the first £350,000 from the proceeds of sale of a jointly owned French property known as Bellevue, with any surplus divided 65:35 in favour of the husband; and, an additional lump sum of £140,000. The husband was to retain chattels of £103,000, the Bellevue building plot worth about £110,000 and the “locked in value” of Villa 15 – a French residence then occupied by his parents.
 HHJ Horowitz QC calculated that the division resulted in a 54% division in favour of the wife, but considered that the small departure from equality was justified by need.
 Subsequently the husband was to seek to set aside that order on the basis of information illegally obtained from the wife’s computer account. At a hearing on 18 December 2013, the judge refused to grant his application to adjourn the proceedings to enable him to file evidence of the contents of the electronic documents he had seen before surrendering them to the wife’s solicitors. His application to set aside the order was effectively dismissed.
 Notices of Appeal were filed dated 6 January 2014.
 The grounds of appeal challenge the financial remedy award on the basis of an unfair division of the assets predicated on:
(i) the unequal treatment of two French properties, one, “Villa 15”, nominally owned by the husband but occupied by his parents, and the other, “ St Paul de Vence” owned by the wife’s parents but in usufruct and subject to a family trust which will benefit the wife and her two siblings equally on their parents’ death;
(ii) the erroneous assessment of the husband’s mortgage capacity;
(iii) the reality of the indebtedness by the wife to her father;
(iv) an incorrect mathematical calculation of the value of chattels; and
(v) the wrong evaluation of the wife’s and A’s housing needs.
Additionally, the judgment and order were said to be reached unjustly, since the judge had only considered the written closing submissions of the wife’s counsel; the husband’s counsel failing to submit any by reason of ill-health.
 The grounds of appeal that challenge the effective dismissal of the husband’s set aside application rely upon an alleged procedural irregularity, in that the judge (i) refused to allow the husband an adjournment to file a statement despite a significant triable issue being raised on the papers and (ii) refused to read the annex to a position statement which set out the husband’s instructions of what was contained within the e-mail account of the wife.
 The single judge granted permission to appeal against both orders without any express provision for necessary extension of time in relation to an appeal against the first order in time. The issue was explicitly raised in the Notice of Appeal placed before the single judge and the delay explained to be by reason of the husband seeking to set aside the proceedings in the court below rather than seeking to appeal. For my part I would treat the permission to appeal as including an implicit extension of time for filing the notice of appeal without any further consideration of the merits of that application.
The September order
 Mr Hall, for the husband (who did not appear below) argues that the division of the assets constitutes an excessive departure from equality since the judge’s award to the wife comprises almost the entirety of immediately available or realisable funds. That which the husband was awarded was difficult to access, and the illusion of near equality was created by what should be regarded as the husband’s nebulous mortgage capacity, the value of luxury chattels in a second hand market and the wife’s father’s dubious insistence that he would seek the repayment of loans in the event of the sale of the former matrimonial home. What is more, he points to an obvious dichotomy in the judge’s treatment of the two French properties in which the husband and wife’s parents respectively resided. On the one hand the husband was found to be morally responsible for housing his parents, but the funds locked into Villa 15 were seemingly taken into account. On the other, the more valuable property belonging to the wife’s parents and in which she would ultimately have a sizeable interest was left out of account.
 Mr Blair QC and Mr Brunsdon Tully, for the Respondent argue that the evaluation of the value of matrimonial assets is largely correct, the mathematical error identified on behalf of the husband inconsequential, and the consequent division of assets is in fact 50:50. They defend the judicial adjudication upon and consequent interpretation of the provenance of the French properties as regards their respective status in terms of being, or not being, matrimonial property. They contend that the findings made by the judge as to mortgage capacity and loan repayment were based on the evidence.
 The judge referred to the statutory guidelines imposed by section 25 of the Matrimonial Causes Act 1973, to be interpreted in accordance with the cases of White [2001 AC 596 and Miller/McFarlane [2006 1 FLR 1186 with a view that fairness should be judged against “the yardstick of equality”. However, he specifically directed himself that the principle of sharing and equality must “yield to adjustment to meet the preponderant need of one spouse, especially where she/he has direct responsibility for any child of the family”.
 The findings as to the husband’s earning capacity were substantiated by the evidence as found by the judge, he notably rejecting the more ambitious submissions on behalf of the wife albeit in the midst of adverse findings in relation to “[the husband’s] willingness to cut and paste documents” to conceal his expenditure and the significant understatement of his income and tardy explanation of his bonus structure. The judge obviously preferred the evidence that the wife’s father intended to enforce the repayment of the loans in the event of the sale of the former matrimonial home, to the husband’s case to the effect that it was an empty threat. There was no competing evidence to contrast on the point. The interpretation of the facts cannot be deemed perverse. These findings are consequently infallible to appeal.
 There is conceded to be a mathematical error in the calculation of assets. In itself it could not be determinative or supportive of this appeal. In reality it is of negligible if any significance.
 The property particulars relied upon by the husband to illustrate the nature and cost of suitable housing for the wife and A were rejected by HHJ Horowitz QC as unsuitable. They were found not to “fit the [wife’s] needs or properly reflect the standard of living in the marriage and the resources available. None addressed her reasonable essential criteria...” The judge’s assessment of the wife’s desire to retain the former matrimonial home and A’s need for stability at this time was articulated sensitively but not sentimentally. The argument which he found “persuasive” was to allow the wife the option of retaining the matrimonial property without increasing the amount of the periodical payments order to finance its upkeep, so taking account of the likely delay in the sale of Bellevue and obviating the “frictional cost of stamp duty”, and without adverse consequence to the husband. The reasoning is unimpeachable.
 The husband stated his housing requirement to be as a single occupier with bedroom space for A and within commuting distance of the City. The judge’s finding that he was satisfied “that from his capital resources and income he will be able to finance the purchase of accommodation” fitting this description may be bald but is in the context that the husband had produced housing particulars suggesting that a £400,000 housing fund was sufficient for the wife. This was affordable even bearing in mind court ordered maintenance payments, on the basis of evidence submitted by the husband and in the light of the judge’s findings that he had sufficient capital to provide a 25% deposit and to fund an income generated mortgage facility up to £500,000.
 I regard the judge’s determination of the housing needs of the husband and wife and A and the manner in which they were to be achieved to be in accordance with a reasonable assessment of the circumstances as a whole and perfectly well explained. Exact parity of housing for husband and wife is not essential and the case of M v B (Ancillary Proceedings: Lump Sum)  1 FLR 53 upon which Mr Hall seeks to rely does not support such a proposition.
 There is nothing in these grounds of appeal that amounts to anything other than a complaint that the judge did not find in favour of the husband’s case. Furthermore, there is no viable support for any argument to the effect that the judicial evaluation of the evidence or the subsequent exercise of discretion was perverse.
 The only possible arguable issue in the appeal against the September order can be the apparent disparity in the treatment of the two French properties, Villa 15 and St Paul de Vence. In this regard it is unfortunate that the reasoning for the difference is not explicit in the September judgment and the issue somewhat defensively addressed in the December judgment as background to the set aside application. It was this deficiency of stated reasons which led the single judge to grant permission in the merits appeal.
 Villa 15 was purchased by the husband 15 months before the parties met. It had been tenanted by his parents since 1994 and it remained their home at the time of the hearing subject to the necessity to sell and purchase accommodation for them closer to a hospital at which his father was to receive intensive medical treatment. The judge below described it as falling outside “the strict marital acquest” and a “long term asset of the [husband] relevant in the longer term as his asset in a needs case but not currently realisable”. The St Paul de Vence property was purchased and is occupied by the wife’s parents. A usufruct arrangement specifies the shares of the parents and their children and grants to the parents a life interest in the property or any replacement property purchased with its proceeds of sale. It was found not to be a “realisable asset in the medium term future.”
 Mr Blair QC emphasizes the differences by particular reference to the funding of the mortgage secured on Villa 15 throughout the marriage and the manner in which the St Paul de Vence property was dealt with in a previous aborted financial remedy application and the hearing before HHJ Horowitz QC. Whilst superficially attractive I do not find it a persuasive exercise since it is at odds with the judicial finding made that Villa 15 was not a marital acquest. This is a justifiable finding on the facts.
 The purchase, and legal and beneficial ownership of the properties are different. Their immediate inaccessibility in provision of funds is the same. The husband’s moral and filial obligation is recognised by the judge, rightly in my view. The inability of the wife to redeem her prospective interest is a matter of much earlier family estate planning. I do not discern a legitimate and fair reason to adopt a different approach to the properties. I do not regard the judge’s explanation that he differentiated between the two since the wife’s shared ownership with her siblings is to be contrasted with the husband’s “simple ownership” as sufficient.
 However, resolving this issue in favour of the husband does not dispose of the appeal. This is certainly not a “big money case” despite the trappings of second home ownership and the disproportionate amount of litigation costs that have been expended. Reading the September judgment as a whole undoubtedly establishes that the judge below considered this to be a ‘needs’ case. Mr Hall concedes the same in his oral submissions. The concept of sharing must cede to the wife and child’s needs – ‘generously interpreted’ in terms of their accommodation.
 The order nets to the wife a total housing fund of £585,000. The husband is obviously left with a much smaller capital base, approximately half that of the wife, but is found to have potential to fund the difference to achieve equal residential stock and is apparently much more resistant to the impact of marital breakdown.
 The error in the judgment that grounds this appeal is the distraction provided by an attempt to assert equality of capital division, or just slight departure from the concept, by inclusion of the value of Villa 15 in the balance sheet. The reality of this case as described clearly indicates that the judge assessed the fairness of the case to be needs not equality. In these circumstances, the discretion afforded to the judge was able to be legitimately deployed without the need to create an illusion of the same. He gives adequate reason for the departure from equality.
 The unfortunate sequence of events that prevented the husband’s former counsel from submitting his amplified written submissions following the hearing in May 2013 appears as a make-weight in the notice of appeal. There is no adequate reason provided as to why his solicitors, who are said to have been in attendance throughout the hearing, could not step into the breach although this is not the complete answer to the quandary posed. Whilst not ideal, I find the solution devised by the judge to have been sufficient and to have mitigated the practical difficulties created by counsel’s ill health.
 It was not unreasonable that he refused to consider late written submissions on behalf of the husband after the dissemination of his draft judgment, but invited Counsel to indicate any areas which had been raised during the hearing but were not dealt with in the judgment, adequately or at all. To do otherwise would be to countenance an invitation for the judge “to hear an appeal against himself.” (See In re L and another (Children) (Preliminary Finding: Power to Reverse)  UKSC 8 @ paragraph 44). The judge’s solution was competent to address any notified deficiencies whilst preserving the right of appeal. As a postscript I note that despite the absence of written submissions for the husband, not all the findings sought on behalf of the wife were made.
 For the reasons above, I would dismiss this appeal.
The December order
 It transpired that prior to the formulation of the judgment the husband came into possession of information obtained unlawfully which he maintained demonstrated that the usufruct was a sham, concealing the wife’s family’s true intentions to benefit her at some much earlier time than anticipated. This fact was revealed by events in September 2013, when counsel for the husband was alerted to the nature of information he had obtained concerning a possible sale of St Paul de Vence. Counsel for the husband e-mailed the judge alerting him to the allegation that there had been a “material failure to make proper disclosure by the wife”. HH Michael Horowitz QC (retired as he was at that stage) refused to countenance unilateral e-mail requests to delay sealing of the order. An application was duly made.
 In the meantime, the documents were returned to the wife’s solicitors. A letter was written on the wife’s behalf detailing the fact of a prospective sale of the St Paul de Vence property in August which had fallen through and the integrity of the usufruct which would mean that, in any event, any proceeds of sale would be “ported over” to a new property purchased for the wife’s parents’ accommodation. The husband’s case was that this was inadequate or inaccurate in the light of the materials he had seen. However, he did not make a statement describing what he alleged he had seen in the materials which contradicted the late disclosure on behalf of the wife.
 We were invited by Mr Hall to read the entire transcript of the December proceedings which he considered furthered his case on this appeal. He also requested that we read the documents which HH Horowitz QC had refused to consider. I have done the first but indicated immediately that I refused to contemplate the second unless this appeal succeeded.
 It is clear, having read the lengthy transcript of the December proceedings that no satisfactory explanation was given in writing or in answer to direct judicial questions as to the means deployed by or on behalf of the husband to obtain the information. Also, as the judge frequently observed, counsel for the husband’s submissions tended to suggest that the husband had interpreted the documents, rather than attempt to reveal their actual content.
 The wife’s counsel resisted the suggestion that the judge should read the documents, or any indication of what they contained in an annexed note to a position statement, but had indicated in e-mail correspondence with the husband’s counsel that he, the husband, should get on and reveal what he said had not been disclosed. The husband’s counsel said he interpreted this to mean that the husband should not file a statement in the proceedings until a directions hearing had been held. He sought guidance from the court as to the correct procedure to be adopted and urged the judge to have sight of the documents before determining the husband’s application for directions in the set Aside proceedings or else the wife’s cross application to dismiss it summarily by perfecting the order made.
 I recognise the professional difficulties for any legal representative informed of the existence of illicitly obtained materials, as did HH Horowitz QC, but this particular topic has been traversed at some length in Imerman v Tchenguiz and others  EWCA Civ 908 sufficiently to give an adequate indication of the steps to be taken. The unlawfully obtained materials must be returned. The recipient’s duty to make any relevant disclosure arising from them within the proceedings is triggered. The ability of the wrongdoer, or their principal, to challenge the sufficiency of the disclosure, is confined to evidence of their memory of the contents of the materials but is admissible.
 The concluding paragraph (177) in Imerman summarises the available remedies open to the court in such circumstances to be:“...in ancillary relief proceedings, while the court can admit such evidence, it has power to exclude it if unlawfully obtained, including power to exclude documents whose existence has only been established by unlawful means. In exercising that power, the court will be guided by what is ‘necessary for disposing fairly of the application for ancillary relief or for saving costs’, and will take into account the importance of the evidence, ‘the conduct of the parties’, and any other relevant factors, including the normal case management aspects. Ultimately, this requires the court to carry out a balancing exercise...”Clearly, the procedure to be adopted is a matter for the judge seized of the application and will be fact specific.
 Mr Hall does not seek to argue that His Honour Horowitz QC did not have the discretion to manage the December hearing and summarily dismiss the husband’s application, rather that he was wrong to do so. I summarise his argument to be that, since the judge was alerted to, and expressly critical of, the wife’s probable lack of candour in disclosing a possible sale of the St Paul de Vence property in August 2013 which was sufficient to found a ‘triable issue’, he should not have deprived himself of crucial information contained within the annex to the position statement filed, or the husband’s prospective witness statement, before exercising his discretion to effectively summarily dismiss the application.
 This argument simply does not withstand the reasoned exposition by HH Michael Horowitz QC of the factors in this particular application which led him to dismiss it without recourse to the material, and which accord with the judgment and guidance in Imerman above. They are to be found in the December judgment at paragraphs 50 and 51. In short, the manner in which the materials were obtained; the husband’s persistent failure to candidly describe the means utilised to do so; the wife’s subsequent and corroborated disclosure; apparent lack of, or minimal relevance to the issues in the case, as demonstrated by subsequent events; the delay; and, the costs – financial and emotional - all pointed to stopping the matter from proceeding further.
 HH Michael Horowitz QC’s conscientious inquiry into the facts and relevant jurisprudence is well demonstrated in the course of the proceedings and judgment then delivered. The time taken in determining the matter does not lend itself to any suggestion of a peremptory disposal but does indicate robust case management as required by the Family Procedure Rules 2010, Part 1. His decision falls well within the reasonable band of discretion afforded to him. It was not incumbent upon him to read the materials in order to reject them. It was not necessary for him to afford the husband additional time to put his application in order, if he could.
 For these reasons I would dismiss this appeal also.
Sir Bernard Rix :
 I agree.