The Court of Appeal has endorsed the approach of the High Court to go beyond appearances when analysing finances and making financial remedy orders.
In a decision handed down in December, the court heard the appeal of Mario Michael against a final financial remedy order made by the High Court on 1 July 2025, which found that a sham trust hid significant assets and awarded £15 million to Mrs Stalo Michael.
Mario Michael was a property investor and developer in North London. Divorce proceedings against Mr Michael were commenced by Mrs Michael in 2022 following a 22-year marriage. The financial dispute following their divorce included two hearings, one lasting for 12 days and one over five days, with the combined spend of more than £5 million on legal fees.
Central to the dispute was a trust with a value of around £38 million. At first instance, Mrs Stalo’s position was the trust was a sham, as the assets in question were owned beneficially by Mr Stalo.
Alternatively, if it were a trust, it was a nuptial resource within the meaning of the Matrimonial Causes Act (MCA 1973).
Mr Stalo’s case was that he had “no legal or beneficial interests in the trust’s assets” and therefore they did not fall under the MCA 1973.
The High Court’s finding of the trust to be a sham was significant, the Court of Appeal noted:
“..,the assets purportedly owned by the trust (in particular, 100% of the shares in an English company called H (UK) Ltd) were in fact beneficially owned by the husband. This was a significant finding for two reasons. First, because a significant proportion of the parties’ wealth (some 75%) was represented by assets which were held within the purported trust structure. Secondly, because the effect of the judge’s finding was to create a significant potential tax liability of the husband’s arising from a restructuring that took place in 2020.”
Mr Stalo’s application for permission to appeal from the final financial remedy order made on 1 July 2025 included several grounds, with permission refused by Lord Justice Moylan on all but three: that the trial judge “erred in his approach to the question of the taxes payable consequent upon the court’s finding as set out in the judgment of 12 August 2024 that the CN Trust was a sham”; had erred in his assessment of the value of a development; and had erred in his assessment of the value of a wholly owned subsidiary.
Lord Justice Moylan noted that an “appellate court gives very substantial weight to a trial judge’s findings of fact and evaluative conclusions and there is a high hurdle before it will overturn or interfere with them”.
On this occasion, he said he had dealt with the issues raised “at greater length than necessary…in deference to the comprehensive submissions” but that the “clear conclusion” was that the proposed appeal had no real prospect of success.
Concluding, Lord Justice Moylan, with Lady Justice King in agreement, said he had not dealt with all the individual points made by Mr Stalo in support of the application for permission to appeal.
“However, for the avoidance of doubt, I have concluded that none of them, individually or collectively, have any real prospect of persuading the Court of Appeal that the judge’s order was wrong.
“There is also no compelling reason to grant permission to appeal. Accordingly, in my view the application for permission to appeal on the grounds set out above must be dismissed.”
Commenting following the August hearing, Jane Keir, family law partner at Kingsley Napley said the process had been long and highly frustrating for their client, Mrs Michael. “Her husband’s needless strategy of obfuscation has only served to worsen his position and increase costs,” Keir said.
“This case should act as a warning to others tempted by creating a false trail designed to thwart the lawful interests of a former partner. The family court has shown it has no hesitation in exposing such misleading conduct.”
