A divorce case in which the husband allegedly arranged a ‘sham £1.6m loan’ as a way of thwarting the wife’s financial remedy claim is to be reheard.

The husband said the money had been advanced by his brother’s company and used in part to help buy the family home in London. He argued that the debt reduced the assets available for division between the couple.

The wife claimed the loan was fabricated after the marriage broke down, designed to make it appear that the family finances were burdened by liabilities that did not exist. She pointed to missing records, inconsistencies in the company’s name and documents that appeared to be backdated.

The Family Court had accepted the husband’s case, relying in part on a judgment from a Nigerian court which recorded the debt following a settlement. But the Court of Appeal ruled the judge misunderstood that judgment, which had not involved any independent assessment of whether the loan was genuine.

Appeal judges also noted the lack of financial records to support the husband’s claim and said the inconsistencies in the documentation had not been properly considered. They concluded that the decision could not stand and ordered the case to be reheard before a different judge in the Family Division.

The ruling underlines the need for close scrutiny of debts said to arise within families, particularly when they have the effect of reducing the assets available to a divorcing spouse.

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Fisayo Olaoluwa Awolowo v Olusequn Samuel Awolowo & Anor

Court of Appeal (Civil Division)
Lord Justice Moylan, Lord Justice Popplewell & Sir Christopher Floyd
[2025] EWCA Civ 641
16 May 2025