The husband's appeal from a financial remedies order was allowed.
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Aug 4, 2016, 09:20 AM
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(Court of Appeal, Black, Lindblom LJJ, 26 July 2016)
Financial remedies – Appeal – Guaranteed lump sum ordered from unrealised assets – Whether the judge had been wrong to order periodical payments from capital while husband was unemployed
The husband's appeal from a financial remedies order was allowed.
The husband and wife were married for 6 years and had two children together, aged 15 and 11. In 2008 they moved to Dubai for the purposes of the husband's work. However, in the same year the bank he was working for collapsed and he lost his job. The husband bought up some of the assets of the bank and sold them at a large profit leaving him with a large capital sum. He had not worked since. When the husband and wife separated in 2011 the wife returned to the UK and issued divorce proceedings.
The family assets comprised of three London properties including the former matrimonial home and two properties rented out. The husband asserted that he used the rental income to pay the children's school fees. They also owned a plot of land in Pakistan. Other assets included a trust holding £1.2m. The wife had outstanding debts of £600,000. She received £2,500pm fro the husband in addition to household bills and school fees. The net assets for division were approximately £3.75m.
This was primarily a need-base case. The wife was found to have only a modest earning capacity. Although the husband suffered from life-threatening pulmonary arrhythmia, he was able to live and work normally. He had an earning capacity of £75,000-£100,000 tax-free in Dubai.
The matrimonial property was transferred to the wife and she would be provided with funds to repay the mortgage, her debts and a Duxbury fund. In total, she received 55% of the realisable assets, excluding pensions which they agreed to share equally. The husband appealed.
The appeal was allowed. The order was inconsistent insofar as it provided the wife with a guaranteed lump sum of £1,831,367. In respect of unrealised assets the order should have provided for her to either have the assets transferred to her or, if wound up for the purposes of transfer to her, the value of the funds realised. The balance would be tipped to far in favour of the wife if a guaranteed lump sum were ordered regardless of the actual value of funds earmarked for her. The order would be amended.
There was no mileage in the husband's challenge to the judge's finding that he would be able to work in the near future. There was no reason to condemn the order as a whole as imposing undue stress upon the husband. It had not been wrong in principle to require the husband to start making periodical payments from capital since the judge had been looking at a relatively short period before the husband obtained employment, Neutral Citation Number:  EWCA Civ 781
Case No: B6/2015/2733
IN THE COURT OF APPEAL (CIVIL DIVISION) ON APPEAL FROM CENTRAL FAMILY COURT MR RECORDER FEEHAN QC FD13D00989
Royal Courts of Justice
Strand, London, WC2A 2LL
LADY JUSTICE BLACK
LORD JUSTICE LINDBLOM
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Miss Lucy Stone QC (instructed under direct access) for the Appellant
Miss Deborah Bangay QC (instructed by DWFM Solicitors) for the Respondent
Hearing date : 21 April 2016
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Lady Justice Black:
 This is an appeal by Mr Ali (hereafter "the husband") against a financial remedy order made by Mr Recorder Feehan QC on 17 July 2015. The appeal is opposed by Mrs Ansar-Ali ("the wife").
 The detail of the matrimonial history and of the provision made by the Recorder is, of course, well known to the parties and I need not set out all of it in this judgment. I will confine myself to what is essential to explain the decision to which I have come.
 The parties were married in 1994 and separated in 2011. They are in their mid to late forties. They have two children who live with the wife. The older child is 15 and the younger is 11.
 The husband worked in London as a successful banker. The wife graduated from the Royal College of Art but did not work during the marriage. The family was based in London until, in 2007, the husband was made redundant and was offered a position with a bank in Dubai. Family life transferred to Dubai from 2008 until the separation in 2011.
 In 2008, the bank for which the husband was working in Dubai collapsed and the husband lost his job. He has not been employed since then. However, with a partner, he bought some of the assets of the bank and managed to sell them at a large profit, leaving him with a sizeable capital sum.
 In 2011, the wife returned to London with the children and issued proceedings for divorce. Protracted and costly litigation followed as the parties disagreed over jurisdiction for the divorce and over the children. The financial remedy proceedings were commenced by the wife in early 2013 but took a long time to reach a final hearing. In part this was because of the husband's ill health. He suffered life-threatening pulmonary arrhythmia but has received treatment and the prognosis for his condition is said to be good. The doctor called to give evidence about his health said that he can live and work normally. The Recorder set out in his judgment that the husband's evidence to him was that although there are some risk factors, he is "fine". The Recorder understood the husband’s evidence to be (as he put it at paragraph 13 of his judgment) that he “anticipates a return to work in the near future once these proceedings are over and sustainable earning capacity of about £75,000 -100,000, tax free in Dubai.” Issues concerning the husband’s health and earning capacity were raised as part of his appeal, however, and I will return to these topics in due course.
 The family assets included real property in the shape of the former matrimonial home in London and two further London properties. One of the London properties was acquired by the husband some three years before the marriage and he argued, unsuccessfully, before the Recorder that it should not be included in the matrimonial assets. This has not been challenged on appeal. Under this heading, therefore, the assets are as follows, taking the values as at the date of the hearing before the Recorder, net of borrowings, tax and (if I have understood the relevant schedule correctly) costs of sale:
Former matrimonial home £865,257
London flat £387,425
London property in SW19 £785,700
 It is only in relation to the former matrimonial home that it is necessary to go into the detail of the borrowing secured against it and the provision made for costs of sale. The value of the property was taken as £1,175,000 and, at the date of the hearing, the borrowing was £274,493 and the notional figure taken for costs of sale was £35,250, thus producing the net value of £865,257. This was the property in which the wife and the children were living. The other two properties are let and the husband’s case is that he has been using the rental income to pay the school fees.
 In addition to the London properties, there is a plot of land in Pakistan worth £161,700.
 There were also other, less tangible, assets. These included HSBC shares in the husband’s name worth £307,000, £50,000 held by solicitors as a bond in relation to the proceedings concerning the children, and a sum of £60,000 which the husband had given or lent to his sister but which the Recorder counted as part of the family’s assets. There were three further funds of a significant size, namely the Falcon Trust, the EFG portfolio and the ICDC portfolio; they have been a particular focus of argument in the husband’s appeal and they need a little more introduction.
 One of the major issues which fell for decision by the Recorder was in relation to the Falcon Trust, which the husband had set up in 2011, transferring into it US$1.5m from his assets. The Recorder set this transaction aside under section 37 Matrimonial Causes Act 1973, finding that the husband’s fundamental reason for the creation of the trust was to keep assets from the wife and to frustrate her claim. That decision has not been appealed. The fund value at the time of the hearing before the Recorder was about £1.2m. The assets were frozen by order of the Jersey authorities. The Recorder expected the husband to co-operate with the dismantling of the trust and the repatriation of the assets to this jurisdiction, failing which “the wife’s lawyers will take the appropriate action either here or in Jersey.” (paragraph 31 of the judgment).
 The EFG portfolio was taken at that time to be worth £280,115. The Recorder did not know whether debits of £116,755 shown in the accounts of this portfolio fell to be deducted from this sum or not; in the event, it turned out that they did, the sum in question being the husband’s overdraft which was secured against the portfolio. The ICDC portfolio had a value attributed to it of £351,252.
 There was pension provision which the parties agreed should be shared equally between them; in this way each would get a pension fund worth £224,644.
 The wife's funds were shown in the schedule of the parties' assets at £15,483. However, her liabilities exceeded them by a long way. Whereas the husband had paid his legal costs from capital, the wife had borrowed to fund hers. Her outstanding debts amounted to over £600,000, much of this attributable to legal costs arising in relation to the various pieces of litigation following the breakdown of the marriage, although some was used for day to day expenses as the Recorder accepted was inevitable because her "monthly stipend from the husband was so modest", being £2,500 per month plus household bills and school fees. The husband challenged the wife’s case that she would have to repay the family and friends who had lent her money but the Recorder accepted the evidence she produced about this and there is no attack on this finding.
 The Recorder worked upon the basis that, in round terms, the net assets for division were about £3,750,000, plus the two pension funds. The Recorder considered that although a case in which the realisable assets are worth £3.75m may not, on the face of it, look like a case in which the outcome would be dictated by needs, there were a number of factors that made this so here. Indeed, he considered that the parties' needs could "just barely be met by what is available with little if any remaining to be shared over and above need".
 The Recorder did not go along with the husband's argument that it was necessary for the wife to move from the former matrimonial home to release the equity in it. He set out in his judgment that, in fact, both spouses thought it preferable to avoid the disruption to the children if that could be afforded and the Recorder thought that it could if the wife took early advantage of what he found to be "her admittedly modest earning capacity". If the property had to be sold in due course to release capital to live off, that would be "a matter for her judgment at that time". Accordingly, he transferred the former matrimonial home to the wife. He decided that she should be provided with the funds to repay the "rather expensive mortgage" on the property, the wherewithal to pay off her debts, and a Duxbury fund to cater for her income needs. Of central importance is paragraph 54 of his judgment. It formed part of the section of the judgment in which the Recorder explained his conclusions as to the division of the assets between the parties which I will set out quite fully.
"53. The available resources from which to derive the necessary funds are identified in [the wife’s] open position as being (1) the husband's EFG bond portfolio worth £280,115 (2) the fund held in the ICDC company to his order worth £351,252 and (3) a lump sum of £1,450,000 represented by the value of the Falcon Trust and an additional sum from the husband. This would be a total sum of £2,081,367. Deducting from that her debts of £624,908 and a mortgage debt of £274,493 would leave a sum of £1,181,966 as an income fund. This is significantly above the £800,000 tentatively and certainly not definitively suggested as the bare minimum by Miss Bangay for the wife.
54. If the wife were to receive those investments plus only the value of the Falcon Trust at £1.2m after the costs of winding it up then her fund would be as follows:
From this would be deductions of £624,908 and £274,493 to leave a Duxbury fund of £931,000. This is more than Miss Bangay's figure but is still at a level which only just meets reasonable the income needs [sic] of the wife and the children when the maintenance of £10,000 per year for them both from the husband which I also propose to order is added to it. I should add that one aspect of the asset profile concerns me: the EFG bond portfolio is listed at a value of £280,115, however there are considerable debits in the accounts which in part comprise that portfolio and it is not clear to me whether those debits, amounting to £116,755 have already been deducted to arrive at the figure of £280,115, or whether the latter sum will be reduced upon the portfolio being transferred or wound up. If the latter then it seems to me that in order have [sic] an appropriate sharing of that liability and to ensure sufficient funds for the wife and the children the husband should add a lump sum payment of £90,000 to the £1.2m which will be available on the winding up of the trust. I am happy to hear submissions and to have assistance on this point when it comes to drafting the order consequent upon this judgment. In particular although the submissions and transfers have been in terms of the "transfer" of the ICDC and EFG funds. [sic] I am happy to hear further as to whether it is better for the husband to be left to wind them up and the net amounts simply to be paid or otherwise represented as part of a global lump sum; the husband says that the transfer of those funds would be more attractive, I have heard no dissent from the wife. In addition the wife will receive her half of the husband's pension as a pension sharing order worth £224,000.
“55. Upon those transfers and/or lump sums therefore the wife will receive a total of about £2,050,000 or £2,070,000 depending on the answer to the EFG debits question. This equates to about 55% of the realisable assets not including pensions. I have asked myself whether given the husband’s undoubted earning capacity this share should be more but it seems to me that for all the husband’s faults in the presentation of the family picture it would be wrong to leave him with much less than he will now retain, particularly since he will have ongoing responsibility, secured on English property, to pay school fees and maintenance.
56. It follows from the above that the husband will be left with his English properties (£1.175m) and his Pakistani property (£161,000). He will also retain his HSBC shareholding worth some £307,000 and the bond held by Speechlys of £50,000 which will come to him in the next few years. I also ascribe to him the £60,000 he lent to his sister and leave it to him to recover that or not as he wishes. Thus even if the additional £90,000 lump sum is payable as considered above he has considerable capital and to some extent the chance to start his financial life anew in addition the pension fund of which he will retain half in the sum of £244,644.”
 Reducing this to tabular form, taking into account that the figure for the EFG portfolio did not in fact make allowance for the debits amounting to £116,755, the Recorder’s provision for the parties was therefore as set out in the following two paragraphs of this judgment, using the figures taken at the date of the first instance hearing. Pension provision has been left out of account, given the pension sharing order dividing that asset equally between the parties.
 Wife’s position:
Former matrimonial home £1,175,000 - £274,493 (mortgage) - £35,250 (notional costs of sale) = £865,257
Falcon Trust £1,200,000
EFG portfolio £280,115 - £116,755 = £163,360 + £90,000 top up due from the husband = £253,360
Less the wife’s debts (£624,908)
Total for the wife £2,044,961 (55% of total assets)
This produced a capital sum, in addition to the former matrimonial home, of £905,211 by way of a Duxbury fund (£1,804,612, being the value of the capital assets other than the former matrimonial home, less the £274,493 mortgage on that property which would be repaid and the other debts of £624,908).
 Husband’s position:
2 x London properties £1,175,000
Property in Pakistan £161,000
HSBC shareholding £307,000
Speechlys bond £50,000
Money lent to sister £60,000
Less sum payable in respect of EFG portfolio (£90,000)
Total £1,663,000 (45% of total assets)
 The Recorder secured the husband’s capital liabilities under the order against the English properties retained by him. Once those capital liabilities were discharged, one of the properties would continue to be charged, to the value of £500,000, as security for the payment by the husband of the maintenance for the children, which the Recorder fixed at £5,000 per annum per child plus a sum equivalent to their school fees and, not mentioned in the judgment but provided for in the order, extras. He took the view that the husband’s assets were such that he could commence the income payments immediately rather than there being any hiatus in his responsibility.
 The order which was drawn up following the Recorder’s judgment was drafted initially by Ms Bangay QC who represented the wife. The draft was provided to the husband who was acting in person and he made amendments to it. The rival contentions of both sides were then placed before the Recorder who produced the final version of the order.
 It is necessary to refer to a number of the provisions of the order which featured centrally in argument before us. Paragraph 27 placed the burden of the costs involved in setting aside the Falcon Trust (“the Jersey costs”) on the husband in the following terms:
“The respondent shall indemnify the applicant, the children and the Trustees for all costs incurred by her in the implementation [of the section 37 order] in the Royal Court of the Island of Jersey and otherwise.”
The order went on to list particular items of these costs which were included in this provision.
 Paragraph 29 provided:
“The respondent shall pay to the applicant a lump sum of £1,831,367 as follows:
a. By 4 p.m. on 16 August 2015, the sum of £1,200,000 (being the monies currently held in the Falcon Trust);
b. By 4 p.m. 23rd July 2015, the sum of £280,115 being the value of the EFG portfolio (the transfer of the portfolio at that value shall be accepted by the applicant in part satisfaction of the lump sum). In the event that the value of the EFG portfolio is less than £280,115, he shall pay such further amount to bring the sum paid hereunder to £280,115, which sum limited to a maximum of £90,000 [sic].
c. By 4 p.m. on 23rd July 2015 the sum of £351,252 being the value of the ICDC portfolio (the transfer of the portfolio at that value shall be accepted by the applicant as being in part satisfaction of the lump sum).
d. In the event the aforesaid sums at a to c above, do not equal £1,831,367, the respondent shall pay a balancing lump sum by 4 p.m. on 31 August 2015.
e. If the respondent fails to pay all or any part of these lump sums by the stated dates, simple interest shall accrue on the remaining balance of the sum at the rate applicable for the time being to a High Court judgment debt.
AND until payment of the lump sum in full, [the husband’s two English properties] shall stand charged as security for the lump sum of £1,831,367 until 28 days after payment of the lump sum…”
 By paragraph 30 of the order, the periodical payments for the children at the rate of £5,000 per annum per child were to start on the day after the husband paid the lump sum provided for in paragraph 29. By paragraph 32, provision was made for further periodical payments for the children “in such sum as shall be equivalent to the children’s school fees and all extras”.
 The husband undertook, as recorded in the recitals to the order, that until payment in full of the paragraph 29 lump sum, he would continue to make voluntary maintenance payments to the wife and the children at the rate of £2,500 per calendar month and meet the utility and other payments in respect of the family home and the children’s school fees and extras.
The grounds of appeal and associated points
 Having acted in person for the majority of the financial proceedings, the husband instructed leading counsel, Ms Stone QC, at a relatively late stage. She provided a skeleton argument dated 20 April 2016 which formed the basis of his appeal. The points which were pursued on the husband’s behalf were further refined in the course of the appeal hearing itself. I will deal with the main ones here, all having been considered.
 The lump sum order was a particular focus of criticism. The main elements of this criticism were as follows:
i) The provisions of paragraph 29 of the order contradicted themselves and were also inconsistent with the judgment.
ii) The Recorder should have provided for the transfer of the assets at whatever value they had when transferred, even if that fell short of the £1.8m which he took as their value at the time of the hearing.
iii) The Recorder was wrong to order the husband to top up the EFG portfolio.
 It was also submitted that the order should not have included paragraph 27 requiring the husband to pay the Jersey costs. This was not dealt with in the Recorder’s judgment, it was submitted, and should not have found its way into the order. Indeed, it was submitted that the Recorder had not, in fact, expected the husband to pay the costs unless he was unco-operative in the process of unscrambling the trust. Furthermore, in Ms Stone’s submission, the amount payable was inappropriately left at large when the husband had no control over the costs that were being incurred.
 A number of arguments were directed at income issues. It was argued that the Recorder’s treatment of the husband’s earning capacity was wrong in a number of ways and his assessment of the wife’s earning capacity was also unsound. It was argued that the husband should not have had to commence payment of the children’s periodical payments until he got employment and that he should not have been required to pay the “non-compulsory extras” on their school bills.
 It was also argued that the Recorder had failed to take proper account of the husband’s needs in determining his order. If he had to pay periodical payments and schooling costs as provided by the order, Ms Stone submitted, he would have too little for his own expenses, including particularly his medical expenses, even if he were to obtain employment.
 The husband also sought to be released from his undertaking about voluntary maintenance payments on the basis that he has essentially satisfied the lump sum order because the Falcon Trust and the other two portfolios have been transferred to the wife. Ms Bangay QC for the wife responded to this application by challenging the jurisdiction of the Court of Appeal to deal with it; it had, in her submission, to be made to the court to which the undertaking was given, see Bell Davies Trading Ltd v Secretary of State for Trade & Industry  EWCA Civ 1066.
 In argument, counsel at times referred to figures which reflected events which had taken place after the Recorder’s judgment, notwithstanding that there had been no application from either side to adduce fresh evidence for the purposes of the appeal. It will be important to keep firmly in mind that the focus of the appeal must be upon the decision which the Recorder made on the basis of the material before him. The Court of Appeal is not entitled to approach an appeal as if its task were simply to re-decide the case on the basis of how things turned out. That is so, as a matter of principle, even if the subsequent material is marshalled and presented in a comprehensive and digestible form; in this case, there was the added complication that it was not. For the most part, therefore, I will confine my consideration strictly to the position as it was before the Recorder.
 The provisions of paragraph 29b and 29d of the order were, in my view, inconsistent with each other and with the introduction to paragraph 29, providing that the husband “shall pay to the applicant a lump sum of £1,831,367 as follows”. Paragraph 29b, dealing with the EFG portfolio, provided that if there were deductions to be made from it, reducing its value below the working figure of £280,115, the husband was to pay a sum to make good the shortfall, up to a maximum of £90,000. If the figures were as they were thought to be at the time of the hearing before the Recorder, this would have meant that the wife would receive £253,360 in respect of the portfolio rather than £280,115 (a difference of £26,755). The sums referred to in paragraphs 29a to 29c would accordingly have totalled £1,804,612 (£1,200,000 + £253,360 + £351,252). Paragraph 29d provided for a balancing lump sum, in the event that paragraphs 29a to 29c did not equal £1,831,367 and, on the order as drafted, that balancing charge would be payable in the sum of £26,755 (£1,831,367 - £1,804,612 = £26,755). What would be the point of limiting the sum payable in paragraph 29b only then to oblige the payer to make the rest of the payment in paragraph 29d? True, the payment date in paragraph 29b was 23 July 2015 and the balancing charge would not have been payable under paragraph 29d until 31 August 2015, but I cannot believe that this period of additional grace of just over a month was the reason for the structure of the order. No one has suggested that such reasoning was ever floated or that it would have been justified by some particular circumstance of the case. It is much more likely, it seems to me, that there was an error in the drafting of the order and that the total lump sum payable should have reflected the cap placed on the husband’s liability under paragraph 29b.
 Ms Bangay QC for the wife in fact conceded that an amendment to the order was required. Her case was that the amendment should be a reduction of £33,000 in the total lump sum payable, reducing it to £1,798,367. This was based on the EFG portfolio having, in actual fact, produced £157,000 for the wife, net of the husband’s overdraft secured against it and before the £90,000 top up, rather than £163,360 as was the equivalent figure using the Recorder’s figures.
 However, it is necessary to address the more fundamental question of whether the Recorder really intended that the wife should receive a guaranteed lump sum at all, as opposed to the value of the assets as at the time of their transfer to her. As to this, Ms Bangay made no concession, defending the order as drafted, subject to the reduction to which I have referred.
 Paragraph 54 of the judgment is illuminating, in my view. Towards the end of it, the Recorder said that the submissions made to him had been in terms of a transfer of the ICDC and EFG funds; such a transfer in specie would have left the wife to take over each fund at whatever value it had at the time of the transfer. He then offered an alternative possibility, namely that the husband might be left to wind up the funds “and the net amounts” would “be paid or otherwise represented as part of a global lump sum”. From this, it seems to me that his thinking was that the ICDC and EFG portfolios would be earmarked for the wife, and she would either get them as they were or receive the net sum realised upon them being wound up by the husband. The flavour is not of a guarantee to the wife that she will receive a minimum of the value of the portfolios as fixed at the time of the hearing.
 This impression is also reflected in the Recorder’s treatment of the Falcon Trust. It seems that the Recorder intended the wife to have “the value of the Falcon Trust … after the costs of winding it up”. He took that, in paragraph 54, as being £1,200,000. No doubt the reason he made no deduction from the value of the fund for the costs of winding up was that he was intending to require the husband to pay those costs (as the order in due course provided) and he was, here, looking at the position of the wife, who would get the net fund. The figure he gave for that was, I think, no more than a notional figure for purposes of his calculations. Paragraph 54 itself began in conditional terms: “If the wife were to receive….” It is often necessary in financial remedy proceedings to take notional figures for the value of assets so as to be able to consider the potential effect of various possible orders and settle upon the one which is appropriate in the particular circumstances of the case. Although this can give the appearance of precision, this is deceptive in that the asset may ultimately not realise exactly the notional figure. The valuation of a house is an obvious example. The parties may agree on a valuation for the purposes of the financial proceedings and that figure is used to determine what orders should be made, but only a sale on the open market will fix what the value of the property actually is. If the house is transferred to one or the other spouse, he or she cannot complain if, upon selling it, it brings in less. Here, it seems to me that the driver for the judge’s approach was that the wife should have “the value of the Falcon Trust … after the costs of winding it up” and not the fixed sum of £1.2m.
 It follows in my view that paragraph 29 of the order should not have provided the wife with a guaranteed lump sum of £1,831,367, or even that sum subject to a reduction to reflect the cap in paragraph 29b but, subject to one matter, should instead have provided for her to have either the assets themselves if transferred in specie or, if wound up for the purposes of transfer to her, the value of the funds realised. The one caveat relates to the paragraph 29b top up provision. It seems to me entirely within the Recorder’s discretion to have required the husband to top up the EFG fund. It appears that the sum of £116,989 secured against it was in relation to the husband’s overdraft. One way to have handled this debt would have been to treat it as reducing the parties’ joint assets and therefore to have divided it more equally between them, with each perhaps bearing £58,494. The Recorder’s requirement that the husband bear £90,000 instead amounted to an increase of only £31,505 over this figure and the differential was justified, in my view, by the husband’s personal spending after the separation. The Recorder commented at paragraph 32 of the judgment that the husband accepted that his personal spending had been at least double the £2,500 per month provided to the wife, despite the fact that the children at best spend only a third of their time with him. The Recorder reflected this disparity, in part, by making provision for the wife’s debts in his order, but he was entitled to reflect it also in the requirement that the husband assume rather more than half of the burden of the £116,989 debt.
 I should add that even if I am wrong about the Recorder’s intention to transfer the assets or their values to the wife rather than giving her a fixed lump sum, I consider that his order requires adjustment to make this provision (hereafter the “no guaranteed lump sum adjustment”). As will become apparent, finances will be tight for both parties in the aftermath of the order and it seems to me that the balance would tip too far against the husband if he were to have to guarantee a fixed lump sum to the wife, irrespective of the actual value of the funds earmarked for her. He would have to draw upon the assets that are left to him in order to make the necessary extra payment and although, for reasons I will set out below, I am not persuaded by Ms Stone’s argument that he is unfairly prejudiced by having been given illiquid assets, one must take into account that not all of the husband’s assets can be realised at present and there are other parts of the order which require him to have recourse to the capital that he can raise.
 Ms Stone’s argument about the liquidity of the assets formed only a part of her criticism of the Recorder’s sharing of the capital between the parties. I would not, in fact, interfere with the order made except to make the no guaranteed lump sum adjustment. On the figures as they were at that time, pension apart, the capital assets were divided as to 55% to the wife and 45% to the husband. This differential was influenced by the Recorder, correctly, making his first consideration the welfare of the children who were based with the wife, and taking into account the wife’s lesser earning capacity. Given the role played in this by income issues, I will return to the topic after I have dealt with the arguments in relation to income a little later in this judgment.
 However, I can set out immediately the reasons why I am not persuaded that the husband has been treated unfairly by being given the less liquid assets. For a start, it is right to observe that the wife’s share of the assets was not free capital in her hands. It was partly tied up in the former matrimonial home and partly tied up because it had to serve as a Duxbury fund in order to top up her income, given her modest earning capacity. As to the husband’s position, I start with the Pakistani land. He says, and no doubt said to the Recorder, that he is honour bound to keep the Pakistani land for his family. He is saddled, however, with the Recorder’s finding that it was an asset available to him and worth £161,000. As things stood at the date of the hearing, the £50,000 bond was set to come back to him in due course, and he had his HSBC shareholding worth some £307,000, then unencumbered. The Recorder left it to him to decide whether to recover the £60,000 lent to his sister but must have formed the view that that was a real option open to the husband. In addition, he had two properties in London. Upon discharge of the lump sum, only one of these properties would be charged, as security for the payment of maintenance and school fees, although it is fair to say that the husband apparently uses the rent from both to pay school fees. In all these circumstances, I do not think that there is anything in his complaint that the distribution of the assets leaves him with an unfair share of illiquid assets.
The costs of dismantling the Falcon Trust
 I do not consider that the Recorder erred in making an order that required the husband to pay the costs of dismantling the Falcon Trust. This was an entirely unsurprising order given the finding that the husband’s “true motivation was to keep [his wealth] from his soon-to-be ex-wife” (paragraph 29 of the judgment) and to frustrate her claim. I note the Recorder’s expectation that the husband would co-operate in the dismantling of the trust and the repatriation of the assets to this jurisdiction in order to avoid further costs to the family and his observation that “if not, the wife’s lawyers will take the appropriate action either here or in Jersey.” I do not infer from that, or from anything else said in the judgment, that the Recorder intended that the costs would only be paid by the husband if he failed to co-operate or that he anticipated that the costs would be minimal. There is, however, in my view, merit in the husband’s point that he should not be required to provide an indemnity in relation to costs over which he has no control at all. These are not costs of the domestic litigation and are not therefore subject to the checks and balances built into the usual domestic costs regime. In the circumstances, it seems to me that the Recorder’s order requires amendment to ensure that there is a mechanism to protect the husband against excess in the costs incurred in dismantling the trust. I would therefore allow the appeal against this provision to the extent that I would amend paragraph 27a of the order so as to provide for the husband to meet such costs as are “reasonably incurred” in the setting aside of the trust.
Income issues and overview
 The Recorder described the husband as “a sophisticated man with sharp financial antennae” (paragraph 29 of the judgment). He considered the husband’s ill-health at paragraph 13. He found that the prognosis following treatment for his heart condition is good, that the doctor had said he could live and work normally. The husband himself had said that although there were some risk factors, he was fine. He told the judge that he anticipated a return to work “in the near future once these proceedings are over”. This expectation of employment in a relatively short period fits with what is said in the appellant’s notice, in section 5 of which, the husband requested that he be provided with money for four months’ living expenses whilst he sought employment.
 Ms Stone did not argue on the husband’s behalf that he cannot work at all but she nevertheless challenged the Recorder’s approach to his earning capacity on a number of grounds.
 I should first despatch her challenge to the Recorder’s finding that the husband would be able to work in the near future once the proceedings were over. There is no mileage in that, in my view, given the husband’s own evidence about it.
 Secondly, she pointed to the doctor’s view that stress played an important role in the husband’s illness and that “ongoing domestic stress” is “the key risk to his prognosis”. This should have been taken into account in formulating the order, in order to ensure that it did not impose undue stress upon the husband, she submitted, whereas the Recorder had failed to have regard to this and had produced an order that put pressure on the husband. I am not convinced that this strand of argument adds particularly to Ms Stone’s other arguments focussed on individual elements of the order, with which I intend to deal separately. Standing back from the detail, the husband received 45% of the family’s assets on the figures as the Recorder took them to be. His share included assets which could be realised if need be, and he himself anticipated getting a job in the near future. If the individual elements of the order withstand scrutiny, I do not see that there is a reason to condemn it as a whole as imposing undue stress upon the husband.
 Thirdly, Ms Stone argued that the Recorder’s finding as to the husband’s earning capacity was wrong. There was no evidence to support his finding in paragraph 13 that it was £75,000 - £100,000 tax free in Dubai, in her submission. She submitted that in taking the bracket that he did, the Recorder had confused dollars and sterling.
 The evidence as to the husband’s earning capacity is not entirely easy to pin down. What the husband said about it in his section 25 statement dated 17 May 2015 was that he was not sure that it was realistic to expect that he would get the type of package that he had had in the past as a managing director and that he was not sure that such a high stress role made sense, even if he could get such a job. He continued, “Today I would be very happy to secure a role in a corporate for around US$75,000 p.a. and stable working hours (or $125,000 in UK terms as there is no income tax in Dubai, or £85,000).” He also explained there that his gap in employment would impact upon his career prospects. I do not see how confusing dollars and sterling would have got the Recorder from this evidence to his bracket of £75,000 – £100,000. Ms Bangay suggested that the Recorder’s figures came from her cross-examination of the husband in which she put to the husband that he could earn £85,000 in his hand in Dubai, to which proposition he agreed. However, there was no transcript of the evidence to assist in exploring this suggestion. Another possibility is that the Recorder intended, in paragraph 13, to refer to the UK grossed up equivalent of what the husband would earn in Dubai and on this basis, the husband’s figure of £85,000 (UK gross) would be in the middle of the Recorder’s bracket. Not finding a ready solution to this puzzle, it seems to me that the right thing to do is to examine the implications for the husband of the Recorder’s income orders from another angle, considering the feasibility of him discharging what the Recorder expected him to discharge on the sort of earnings to which he alluded in his statement.
 Ms Stone argued that the whole of the husband’s US$75,000 would be consumed by the school fees and periodical payments for the children, leaving nothing for him to live on. That is not a tenable proposition. The husband’s earnings were not his only source of income. He also had rental income from the English properties, and income from his HSBC portfolio, both subject to tax as I understand it. A schedule of this income was supplied, post-dating the hearing before the Recorder. It was said to give the gross figure for the rental income but includes a figure for “tax” in both the rental income section of the schedule and that relating to the share dividends. According to the schedule, the husband’s total annual income from rent and shares is £28,875. The school fees are £36,000 plus extras so the unearned income would go a significant way towards discharging these. The husband’s current complaint about having to pay the extras was not, apparently, raised during the hearing before the Recorder and it is difficult for him to pursue it for the first time on appeal. His long term maintenance liability for the children on top of the school fees/extras is limited to £5,000 per annum per child which Ms Bangay rightly describes as “relatively modest”. Assuming he paid it from a salary of $75,000, the husband would still be left with approximately £40,000 for his own expenditure, including whatever medical expenses he incurs. These were put at £6,400 per annum by him in a document from June 2015 requesting the Recorder to clarify his judgment, but the figures in his Form E were rather different. Extra money to cover the school expenses and to top up the husband’s personal spending would have to come from capital but, once the husband was earning, this would not be a huge drain on the capital and, as things were at the time of the hearing before the Recorder, there was potentially liquid capital available.
 Was the income provision made for the wife and the girls excessive, either because it was over-generous to them or because it was unaffordable by the husband, leaving him insufficient for his own needs? The answer to a question such as this always depends upon a variety of elements including the earning capacity of both parties and their other income and the appropriate level of budgetary provision.
 It is a pity that the judgment contains no detailed examination of either party’s budget. We were not treated as part of the appeal process to the sort of budgetary inspection that would enable us to reach detailed conclusions about their income needs either. Indeed, the exercise would have been very difficult to do because it was impossible for us to reconstruct the oral evidence received by the Recorder, which would have had a very significant bearing on this question. What I think is very clear from the judgment is that the Recorder expected both parties to retrench substantially from the budgets they had laid out on paper in preparation for the trial. This was inevitable given the limits on the family resources. What I think also emerges from the judgment is that the Recorder had in mind the realities of life for each spouse when planning the division of the assets between them. He rejected, for example, the notion that the husband should get less than 45% of the assets because, as he said in paragraph 55 of the judgment, it would be wrong to leave him with less, “particularly since he will have the ongoing responsibility of paying the school fees and maintenance”. His consideration of the wife’s position was carried out in the context of his deliberations about a Duxbury fund for her. He was working on the basis that his order would provide a Duxbury fund of £931,000 which Ms Bangay calculated would have produced £44,807 per annum. The Recorder said that this “only just meets reasonable the income needs [sic] of the wife and the children when the maintenance of £10,000 per year for them both …is added to it.” As it turns out, of course, the fund will be significantly less than £931,000, not least because the wife will not have a guaranteed fund of £1,831,367. The Recorder’s order will require even more retrenchment by her than he anticipated, therefore.
 But nevertheless I return again to the question whether the order, as adjusted in the course of this appeal, was over-generous to the wife? Ms Stone was not suggesting that the wife’s earning capacity was anywhere near the husband’s or that she could provide for herself without assistance by way of income from a capital fund and maintenance for the children. However, she did criticise the Recorder for failing to specify what sum he took for the wife’s earning capacity which he described only as her “modest earning capacity” (paragraph 51). More detail in the judgment would undoubtedly have assisted, on this point as on others. Ms Bangay was able to tell us that the husband put to the wife in cross-examination that she could be a teaching assistant and she agreed that she could earn £10-15,000 gross after training. This would appropriately be called a “modest earning capacity” and it seems likely that this was the sort of range that the Recorder had in mind and there was nothing put before us to show that this would have been an inappropriate finding. This level of earnings, together with a Duxbury fund of the size that the Recorder anticipated, and £10,000 maintenance per annum for the children was, I think, accurately described by him as only just meeting their reasonable income needs and the position will be tighter given the reduction in the money available for the Duxbury fund. However, the Recorder had no room for manoeuvre as the husband’s position is equally tight, requiring him to have recourse to capital which is not unlimited. As the Recorder had forecast, this was a case in which the parties’ needs could barely be met from their assets, and overall, I am not persuaded that he approached the income question in a way which was unfair to the husband.
 The husband complained that he had been required to start payments for the children immediately, from capital, arguing that he should have been required to start paying periodical payments only once he had got a job and that it was wrong in principle to require payment of these from capital. I do not agree. The Recorder was looking at a relatively short period as the husband had forecast that he would get employment in the near future once the proceedings were over. I do not think it can be said that it was wrong in principle to require him to pay the girls’ maintenance from capital during this period. I do not think the husband was suggesting that he should not have to pay the school fees, and there was sufficient capital to fund £10,000 per annum periodical payments as well. The alternative, that the husband would advise the wife once he got employment, would, as Ms Bangay observed, be difficult for the wife to police, a material consideration given the husband’s “heartless conduct in 2009 and 2011” (the Recorder’s finding at paragraph 30) and his deceit in relation to the Falcon Trust (ibid).
 Coming full circle, one stands back to consider in the light of all the various factors whether the capital provided to the wife was over-generous or provided for her at an unfair cost to the husband whose needs were neglected. As I have indicated a number of times, I do not consider that the division of the assets as to 45% to the husband and 55% to the wife can be said to be wrong for any reason. The financial affairs of these parties were a relatively complex web, much of which it has not been possible to reconstruct in the course of these appeal proceedings. We have not had the advantage that the Recorder had of hearing them give oral evidence and learning from them the practical and financial detail which was essential in order to share out the assets fairly between them, making provision as far as possible for their needs. I have identified the respects in which it seems to me the husband’s appeal must be allowed, namely (1) to align the order with what I think must be taken to be the Recorder’s underlying intention, by tying the capital provision for the wife to the value of the assets transferred to her as I have set out above, rather than her receiving a guaranteed lump sum, and (2) by limiting the husband’s liability for the costs of unscrambling the Falcon Trust to reasonable costs. This, in my judgment, will secure a fairer distribution of the assets between the parties. It will not enable either to live in comfort. I would not otherwise interfere with the Recorder’s order which it has not been established strayed outside the bounds of the orders which were available to him on the material before him. The husband leaves the proceedings with 45% of the assets, as opposed to the wife’s 55%, but with a materially better earning capacity than the wife has. Neither party will find life as easy as they might wish, I think, but it has not been established in the course of the appeal that the result is unfair to the husband so as to require further adjustment.
 Finally, I should deal briefly with the question of the husband’s undertaking. CPR Rule 52.10 provides that, in relation to an appeal, the appeal court has all the powers of the lower court. It seems to me, therefore, that in so far as it is necessary to deal with the husband’s undertaking as part and parcel of the successful appeal against the Recorder’s order, this court is entitled to do so. This would be a very different situation from an attempt to bring a free-standing appeal against an undertaking, which would be likely to meet with the response that an application to the lower court should be made first.
 However, this court is ill-suited to the sort of detailed examination which will be necessary in order to ascertain whether and, if so, when the lump sum due from the husband under the order as amended has been paid in full. The figures are far from clear at present and more information was coming in during the hearing. Certainly, it seems very unlikely that the £90,000 top up due from the husband has been paid as yet. The parties will have to deal with the calculations and in default of agreement, the implementation of the amended order which I would substitute for the Recorder’s order will have to be dealt with at first instance. There are in any event continuing enforcement proceedings and this will no doubt be joined with them, although I do urge the parties to attempt to reach an agreed practical solution that will bring to an end this stressful litigation and enable both of them to get on with their lives. It seems to me appropriate that the husband’s responsibility under his undertaking should be partially suspended pending the resolution of what remains payable by him, given that he has now paid a large part of the lump sum due. Doing the best I can, I would therefore suspend his liability under the undertaking to pay anything more than the school fees and extras plus £1,000 per month, which is a little over the figure that he will have to pay once paragraph 30 of the Recorder’s order comes into effect. The suspension is a suspension and not an extinguishing of liability and is to last only until the next occasion when the enforcement issues are addressed at first instance, at which stage the husband will be able to raise the question with the first instance judge. Should the enforcement proceedings not proceed to a hearing for any reason, the suspension will cease in 12 weeks from the date of the Court of Appeal order and it will be for the husband to make any further application to the first instance court. Alternatively, payment of the quantified shortfall of the lump sum will, of course, bring the undertaking to a complete end. Should the first instance court already have addressed the question of the undertaking in the period between the appeal hearing and this judgment, I would intend that the matter be governed by the orders made at first instance and that my proposed solution should not take effect.
 I do not wish there to be any misunderstanding about the order which, if my Lord agrees with my proposed approach to the case, will be the operational order following the appeal. The terms of the Recorder’s order need amendment only to reflect the matters I have indicated and there will be no alteration to any of the other provisions. For the most part, this should cause no confusion. However, I am anxious that dispute should not arise about the treatment of the costs of unscrambling the Falcon Trust. I have noted that in argument, these costs have been brought in at times as part of the exercise of ascertaining the value of the Trust. That is not how I read the Recorder’s order. The wife has transferred to her the Falcon Trust or its wound up value quite independently of the question of the costs. The husband is required, by paragraph 27 of the Recorder’s order, also to reimburse the reasonable costs of the unscrambling process, including the costs of the nature set out specifically in paragraph 27a (the costs of dealing with the injunction etc).
 In summary, I would allow the appeal to the extent that I have set out above, and to be found summarised in paragraph 54.