A v N

I am concerned principally with an application for financial remedies upon divorce. However, within that application, I have to deal with a separate legal issue, not without difficulty. It is an issue that is becoming more common within financial remedy proceedings reflecting change in society more generally. That is where an elderly parent comes to live with their adult child and spouse, and makes a significant financial contribution to the home in which all the parties are then to live.

Where, as here, there is a subsequent divorce this presents problems both as to the extent to which, if at all, the parent has acquired a beneficial interest in the matrimonial home but also, practically what is to happen to that home at the conclusion of the proceedings. For, often the parent’s interest, if any, is not formally recorded: he or she is not on the legal title of the property and there is no express deed of trust. Further, as the home is that of both the parent and the spouses decisions as to what is to happen to it require both sets of interests to be considered.

In such a situation where the elderly parent subsequently intervenes within the financial remedy proceedings, the court must carry out two quite discrete exercises. Firstly, it must establish the extent of the beneficial interest, if any, of the parent in the matrimonial home. It is only once that exercise is complete, and the extent of the spouses’ interest in the home established, that it then goes on to consider, secondly, the usual discretionary statutory exercise under the Matrimonial Causes Act 1973.

However, whilst the legal principles are quite discrete the factual implications are often less so. For should the matrimonial home ultimately be sold the elderly parent will usually go and live with their adult child in their new home. Thus, the elderly parent’s share of the proceeds of sale, whilst having been removed from the matrimonial pot for the purposes of computation, may come back into play from the point of view of assessing housing resources. This element of circularity makes pragmatism the touchstone of trying to resolve such disputes and it is regrettable that this matter has had to incur the significant costs of this final hearing.

The applicant wife is A born on 11/6/67 and thus now 58. I shall refer to her throughout this judgment as “W”. She has been represented throughout this hearing by Mr Henry Pritchard of counsel.

The respondent husband is N born on 9/1/71 and thus now 54. I shall refer to him throughout this judgment as “H”. He has been represented throughout this hearing by Ms Caroline Middleton of counsel.

The intervenor is the wife’s mother R I shall refer to her throughout this judgment as “R”. R has been represented by Ms Sophia Paraskeva of counsel.

In all cases no disrespect is intended by these abbreviations which are simply adopted for convenience.

H and W married in March 1996 following 2 years of cohabitation. They separated in 2023 when W issued her petition, albeit H, W and R all continue to live in the matrimonial home. This is accordingly a long marriage of some 29 years inclusive of seamless co-habitation.

There are five children of marriage: P, Q, D, S and T. Only T who is now 15 remains legally a minor. However, a number of the ostensibly adult children, Q, S and D, continue to live in the FMH. This fact is something I shall return to when considering housing need.

H and W lived in a number of homes prior to the purchase of the current matrimonial home. There is little dispute that H and W’s moves up the housing ladder, prior to the purchase of the FMH, were assisted by cash gifts from R from time to time. However, prior to the purchase of the FMH, R lived separately and there is no dispute that the provision of these cash sums was by way of outright gift.

As referred to above, the divorce proceedings started on 12 April 2023 though there was not a conditional order pronounced until 30 July 2024.

I have already adverted to the first issue with which I must grapple; namely the extent to which R has an interest in the FMH and, if so, the extent of that interest.

Thereafter in respect of the financial remedy proceedings between H and W the following the computation issues arise

Thereafter I must decide upon:

A number of other issues have arisen in the course of the hearing. Some of these arise as sub-issues within the above principal issues and I will deal with those therein. Others do not. I have not ignored these other matters. It is simply that it seems to me they are not necessary for me to address in this judgment to explain my decision.

I do not propose to set this out at any length. Financial remedy proceedings were begun by W issuing Form A on 1 September 2023. The First Appointment was dealt with under the accelerated procedure by consent on 20 December 2023. There was an unsuccessful FDR before Recorder Nice on 29 April 2024 and the matter was set down for trial, initially listed for two days. Given there were issues in respect of the valuation of H’s company and expert evidence was being sought, this time estimate seems to me even then, with hindsight, to have been a little optimistic.

However, at this point R had not intervened in respect of her potential beneficial interest in the FMH. Nor was it raised on the face of Form E by W. However, the issue was clearly flagged up at or before FDR, as R’s possible intervention is addressed in directions following the FDR.

R duly intervened thereafter and was formally joined to proceedings on 13 September 2024 by order of DDJ Hodson. At that date the time estimate for the final hearing then fixed for 13 February 2025 was extended, but only for a further day, with provision for a PTR on 23 January 2025.

The PTR took place before DDJ Arnot. By this stage R’s case had not been formally pleaded, as had been ordered by DDJ Hodson, and further directions for pleadings were given. It was also clear by this stage both that the SJE business valuer, Sally Longworth, was required to be called to give live evidence and moreover that there remained arguments over the X Country usufructs. Inevitably the February listing had to go and the matter was relisted. However, it does not appear the parties revisited the time estimate and the listing remained at three days.

This matter then came on before me for trial on 14 July 2025 for three days. It was immediately apparent the time estimate was woefully inadequate given the extent of the issues. Within the three days it was possible to hear the live evidence and hear very abbreviated submissions. In the circumstances I gave the parties permission to submit fuller supplementary written submissions, and I reserved judgment.

I apologise this reserved written judgment has taken longer than I anticipated. This arises from the combination of intervening holiday periods and other professional commitments. However, the root of the difficulty lies with the initial unrealistic time estimate. Given the extent of the issues and the third party intervention this was always a four-day case.

Given the volume of evidence, the bundle alone runs to some 1082 pages, I will only refer to those matters which I find are relevant to my decision. That does not mean that I have not taken account of other matters, merely that it has not been necessary to refer to them in this judgment.

As far is live evidence is concerned in addition to H, W and R I also heard from Sally Longworth, the expert business valuer.

I will briefly outline my impression of the witnesses in giving their evidence.

I heard first from R. I have little doubt that she was doing her best to assist the court. Perhaps understandably, given her age, she struggled with some matters of detail and had only a limited grasp of the legal issues in play. Whilst I generally accept her evidence, like all the party witnesses her recollection of past events was influenced by her present position in respect of the ownership of the FMH and I therefore treat that aspect of her evidence with a little care.

W’s evidence I found the least impressive of the witnesses. Again, not because I thought she was deliberately seeking to mislead, but because it seemed to me her evidence was most coloured by retrospect and her current position as regards the FMH. She also clearly was deeply suspicious of H and what she saw as his deliberate machinations in respect of his company and the X Country properties. W had a tendency to give forthright evidence on the extent and timing of the financial support she received from her mother, R, but on closer questioning was wholly unable to give supporting detail. I thus must treat her evidence, especially in relation to the purchase of the FMH and the intentions behind R’s contributions thereto with some caution.

H gave his evidence in a more measured fashion and again I had no sense he was trying to mislead. In general, I accept his evidence. However, when looking back at the events concerning the purchase and subsequent renovation and extension of FMH, like the other witnesses I had the sense his evidence was significantly shaped by his current case. In my view he struggled to rationalise his clear evidence that what was to become R’s annexe was treated separately financially by all the parties with his insistence R was to have no financial interest in the FMH at all. I therefore again must exercise some caution with this aspect of his evidence.

Sally Longworth, the expert business valuer, was a careful and considerate witness. I found her evidence compelling and I largely accept it as set out more fully below when dealing with the issue of the valuation of H’s business.

In deciding this question the substantive law I apply is the civil law of property. There is no place for any discretionary relief or other less rigorous assessment in the family court – in the words of Nicholas Mostyn QC (as he then was) in TL v ML (ancillary relief: claim against assets of extended family) [2006] 1 FLR 1263: “It is to be emphasised, however, that the task of the judge determining a dispute as to ownership between a spouse and a third party is, of course, completely different in nature from the familiar discretionary exercise between spouses. A dispute with a third party must be approached on exactly the same legal basis as if it were being determined in the Chancery Division.” (emphasis added)

R does not appear on the legal title. Further there is no express deed of trust conferring a beneficial interest upon her. In these circumstances she must establish a form of implied trust.

The modern distillation of the law in this area starts with Oxley v Hiscock [2004] 3 WLR 715 per Chadwick LJ at paragraph 40 and as explained by the House of Lords in Stack v Dowden [2007] 2 AC 432 and later by the Supreme Court in Jones v Kernott [2012] 2 AC 776.

These combined dicta suggest, at least that when considering implied trusts in the “domestic consumer context”, that it is the law of constructive trusts or, to be more precise, common intention constructive trusts which should be considered. The precise ambit of the “domestic consumer context” may be a matter of some legal debate. In short, however, it distinguishes between the motives and assumptions of parties in intimate familial or co-habiting relationships in respect of their own home with those of parties in more commercial situations. Whilst the paradigm example is the co-habiting couple, whether married or otherwise, in my view it also extends to arrangements between elderly parents and their adult children in respect of the purchase of a home in which all are to live, and absent any significant commercial element to those premises.

Where, as here, the party claiming an interest does not appear on the legal title the forensic exercise can be distilled as follows:

Throughout, the burden of proof is on the party not on the legal title to show an interest and the amount of that interest.

As to the necessary proof, in the domestic consumer context, a common intention trust can be proved in one of 2 ways:

As to what conduct will give rise to an inference of an agreement the starting point is the well-known dicta of Lord Bridge in Lloyds Bank v Rossett[1991]1 AC 107. This is to the effect that such inference will readily be drawn where there is a direct contribution to the purchase price or mortgage payments. Such is both the basis of the inference and evidence of the detrimental reliance thereon. Lord Bridge doubted anything else would suffice. In both Stack v Dowden and Jones v Kernottit was said that that the law had moved on somewhat from Rossett but no further clarification was forthcoming as to what else would suffice as a basis for an inference.

In both Rosset itself,and in the later case of Grant v Edwards [1986] 1 Ch.368, it was acknowledged that inferences could also be drawn, albeit more rarely, from events after purchase. Though, as in neither case that was factually relevant, little further clarification was provided as to what would suffice in such circumstances.

Many of the subsequent cases have been examples of what will not suffice. For example, mere contribution to the domestic economy or improvement works on the property of a cosmetic nature or even project management of a more significant development within a long term relationship are unlikely to suffice as the basis of such an inference. Dicta of both Sir John Chadwick in James v Thomas[2008] 1 FLR 1598 and Sir Peter Gibson in Morris v Morris [2008] EWCA Civ 287 are to the effect that the court should be slow to infer that, within an intimate relationship, the motives for such actions are attributable to pecuniary self-interest. In other words, such actions are better understood as principally motivated by the close relationship itself and sharing a home together, than as being motivated by the desire to have ownership of the underlying property.

However, significant capital expenditure on a property whether by paying down the outstanding capital on a mortgage or payment for significant building works may well suffice to draw the necessary inference. An example of the latter is Aspden v Elvey[2012] EWHC 1387 (Ch) where substantial financial contributions to the conversion of a barn into a dwelling were sufficient to give rise to an inference that the non-legal owner was to have a beneficial interest. What inference is appropriate is of course fact sensitive.

Once the threshold is crossed for an inference to be drawn that there was to be some sharing then the horizon of the court becomes broader. Other matters that would not in and of themselves be sufficient to base an inference to share can however be taken into account in assessing and drawing an inference as to what any shares should be. Further, it is at this stage that the court can even impute intentions.

I should, however, add that where money is advanced by a non-legal owner into the purchase of a property it does not inevitably lead to the conclusion that it is advanced referable to having an interest in the property. It may also be advanced, depending on the circumstances, by way of loan or gift – neither of which would lead to a beneficial interest.

Moreover, as between a parent and child there still exists an evidential presumption of advancement. Thus, money paid by a parent to or on behalf of their child is presumed to be by gift. In modern times this is considered a weak presumption, it has been long threatened with abolition by statute, but absent any evidence to the contrary such presumption still applies.

Finally, an elderly parent may acquire an interest in occupation in a home falling short of a proprietary interest in the ultimate proceeds of sale. This may arise despite the fact any direct financial contribution to the property is found to be by way of gift (or indeed loan). This is on the basis that the money was advanced on the common understanding that that the parent would have a permanent right, as against the legal and beneficial owners, to occupy the property. This right of occupation, being relied upon at the time of the advance of monies, then gives rise to a beneficial interest in respect of such occupation, either by way of constructive trust or irrevocable licence. Such was found in the case of Re Sharpe (a bankrupt) [1980] 1 All ER 198 – a decision of Brown-Wilkinson J (as he then was). This was also a case of wider family members sharing a home. There an elderly aunt lent money to her nephew to purchase a home on the understanding she too would live there, and he would repay her when he could. He was subsequently declared bankrupt. His trustee sought a sale of the property. The court refused on the basis that the aunt’s right to occupy bound the nephew, and in turn his trustee, by way of an irrevocable licence or constructive trust pending repayment of the money loaned in full. Though now quite an old decision it has not been subsequently overruled and has been considered by the Court of Appeal in Risch v McFee [1991] 1 FLR 105, albeit somewhat in passing. Such an interest would of course have no direct impact on the computation of matrimonial assets but may have an impact on questions of liquidity and on the exercise of any power of sale. For in Re Sharpe it defeated, or rather postponed, an application for sale by a trustee in bankruptcy. Consideration of such a right will likely only arise where a beneficial interest is not otherwise found.

I then apply the above law to the facts of this case.

The FMH was purchased on 13 February 2012. It was purchased in the joint names of H and W. It is common ground they could not have afforded the FMH without the financial assistance of R. It is also common ground that from the time of the purchase, and indeed before the purchase, it was intended R would live in the FMH with H and W. For the FMH was expressly selected on the basis that a semi-separate accommodation could be built in which R would ultimately live. I will refer to this hereafter as “the Annexe”.

The conveyancing file no longer exists but there are some limited contemporaneous documents. These include the completion statement. This shows the breakdown of the contributions to the initial purchase price and associated costs. These amount to a total sum of £881,161. Within that document it is clear, and as a matter of fact there is no dispute about this, that R contributed the sum of £130,000 to the purchase price. The rest of the price was made up of a mortgage advance of £270,215 with the balance coming from accounts held by H and W – largely as I understand from monies received from the sale of H and W’s previous home.

In the completion statement R’s contribution is described as “mother gifted deposit”. I entirely accept that R was not a client of the conveyancing solicitors who drafted this document. So, it is possible this description did not originate from R directly. However, I am also conscious of the obligations of conveyancing solicitors to establish the sources and purpose of funds used to purchase property. This is all the more so where the solicitors, as I deduce was the case here, also acted for the mortgagees. For the mortgage lender will nearly always require an explanation for any other contribution to the purchase price outside that of the named buyers. It therefore seems to me that it is more likely than not that the conveyancing solicitors established from R herself that the money was to be described as a gift. This is the only contemporaneous written evidence in respect of the money and the purpose of its advance.

Given what is recorded at the time I look at what the parties now say. In her pleaded case R asserts that a resulting trust arises on the basis of:

R goes on to plead that her £130,000 contribution was referable to her paying £100,000 for the land upon which the Annexe was to be built and £30,000 for electrical works to be done by H in the construction of the Annexe. She repeats this suggestion in her witness statement. This strikes me as inherently improbable. It has all the hallmarks of an explanation by way of retrospect. For the Annexe had by this stage not even been designed and thus it would not be at all clear what the extent of the land upon which it was to be built would be still less what the value of that would be in isolation. No explanation is advanced as to how the figure of £100,000 was arrived at and no documents were produces supporting such a figure. The alleged payment for the electrical works is even more contrived. Prior to even the design of the annexe or any of the other estimates for the build coming in it would have been impossible to estimate what electric costs might be, still less quantify them precisely at £30,000.

Most tellingly this explanation is not what R advanced in her oral evidence. In her oral evidence she suggested the money was advanced as a form of loan. Nothing to this effect is in her pleading or witness statement. I was not clear when or how it was expected this loan was to be repaid. In this regard I think R was becoming somewhat confused in trying to retrospectively fit facts into what was now her case. W, in her evidence, could throw no light on this alleged loan arrangement and how it was supposed to work. H was more compelling in his simple denial there had never been any loan arrangement. I do not find that there was ever a loan arrangement in respect of the £130,000.

Other aspects of R’s evidence, however, I did find compelling. In particular her very clear evidence that she wished to, and had, treated all of her 3 daughters equally in respect of lifetime gifts. She explained, and I accept, that the amount of the gifts was approximately £350,000 each. This was largely accepted by all parties, though there were some small discrepancies about the exact sums W received and when she received them. Furthermore, R told me, and I accept, that she had been very generous to her daughters. Perhaps even to her own financial detriment. Again, this was largely common ground, with H telling me in evidence that he had in particular been concerned about the extent to which R was giving all her money away, and had spoken to her about this when R was living with them.

That then gives rise to the question of how R’s contribution of £130,000 to the purchase of the FMH fits in with these lifetime gifts. The evidence was at times confusing as to the history of financial advances to W over the years. For example, as to how much was gifted for the purchase of previous homes and how much advanced at other times. However, I am satisfied that the £130,000 was part of R’s £350,000 advance to W. Indeed, absent the £130,000 being part of the overall gift I do not see how W would have received her full £350,000 odd. In W’s evidence she could not show me how else she received this. This is of course entirely consistent with how the money was described in the completion statement referred to above.

I am further satisfied that that payment was the final part of R’s gift to W. Perhaps oddly it was H who was the most clear on this point as in his evidence he said he was not aware of any significant money gifts from R to W after the purchase of the FMH. W in her evidence somewhat confusingly suggested there were significant gifts after the purchase of the FMH but when pressed on detail could give none. W’s account in evidence is also inconsistent with what she said in her original Form E. For in that W asserted an unmatched contribution of £350,000 into the family home by way of inheritance. By implication this included the £130,000 directly advanced for the purchase.

R was not able to assist much as to the precise timing of the advances to W but was clear on the overall sum gifted and that all her daughters were treated the same. Of course, they would not be treated the same if part of the money advanced to W was by way of loan or an investment into the FMH. There being no suggestion the monies provided to W’s sisters were anything other than outright gifts.

Overall, therefore I am entirely satisfied that the £130,000 advanced towards the purchase price of the FMH from R was intended as an outright gift to W. It was advanced as part of R’s policy of advancing money to her adult children. This is entirely consistent with the contemporaneous reference to it being a gift in the completion statement. In the premises it does not confer on R any beneficial interest. As I find this clearly on the evidence I have no need to have recourse to evidential presumptions such as the presumption of advancement.

That, however, is not the end of the matter. For not long after purchase and moving into the FMH it was decided, substantially at the instigation of R that the construction of the Annexe should commence. This was rolled up with other improvements to the FMH. The works involved, in broad brush, a garage being knocked down and a self-contained “granny annexe” being constructed in its place. The Annexe whilst providing separate accommodation was physically attached to the main part of the FMH and did not have separate utilities. At the same time as the construction of the Annexe there was also to be a rear extension constructed for the benefit of H and W and their family and also to provide some space for a home office and workshop for H and his business.

It is clear that the funding of this extension was subject to a loose but nonetheless clear agreement that there was to be a distinction in funding between those parts of the works attributable to the Annexe and those parts attributable to the rest of the FMH. This was common ground in the evidence of all parties. R was to be responsible for the construction costs and fit out of the Annexe and H and W for the rest of the extension. The original estimate for the works was £97,450 of which H conceded some £77,850 related to the Annexe. The division in costs of the overall works was thus approximately 80% to R and 20% to H and W. H also conceded that R would have probably spent a further c£30k on decoration costs post the completion of construction.

Counsel, at my request, provided an agreed schedule of R’s evidenced expenditure. This shows evidenced payment from R of £75,720 on the design, fit out and construction of the Annexe from January to December 2012 – the main construction phase of the works - the majority of which was paid direct to the main contractor, L Construction. The works may thus have come in under budget or alternatively after this length of time not all payments can now be evidenced.

Since that time R has spent further sums on the Annexe including a redesign of the bathroom in 2013 to make it more suitable for her needs and some replacement doors, flooring and new furniture over the years. These expenses amount to just over £20,000. She has also made a significant contribution to a garden redesign at the FMH amounting to a further £15,000. Finally, and most recently, in 2024, the roof on the Annexe and the extension to the main part of the FMH had to be repaired. The costs of these recent repairs were not particularly significant – R’s share a little over £2,400 - but it is common ground once more that these costs were expressly apportioned between R on the one hand and H and W on the other. R paid the repairs related to the roof over the Annexe and H and W paid for the roof repairs over the main part of the FMH. In evidence H fully accepted that the arrangement was that R was and always had been considered financially responsible for the property related costs referable to the Annexe whilst he and W were responsible for those related to the rest of the FMH. This is in my view significant.

As far as the funding of R’s share of these works this originally came from a commercial loan with Svenska Handelsbanken for £90,000. The repayments and interest for this loan were met from rental income coming from R’s former home at Y in C Area. R retained this after moving in with H and W. In 2014, after the completion of the Annexe, R sold Y and repaid the loan. The balance of the proceeds of sale of Y were retained by R, in part accounting for what remains of her now limited capital and in part being spent on the wider family including significant family holidays: in large part the source of H’s, and in part R’s, view that R’s generosity was somewhat at the expense of her financial prudence.

Given the importance of the Annexe, a direction was given to the valuers who valued the FMH to try to put a value on what the construction of the Annexe has added to the overall value of the FMH as a whole. Unfortunately, of the three valuers, only one of them, Bairstow Eves, actually answered this question directly. They stated that the construction of the Annexe likely adds £200,000 to the value of the FMH in total. As the agreed value of the FMH is now £1,540,000 this suggests the Annexe constitutes approximately 13% of the overall value. This is however only one valuer. Of the other valuers, Vanessa McCallum Estates said they could not value the Annexe separately as it could not be sold as a stand-alone property - this of course was not the question they were asked. They did concede, however, the Annexe would add value in terms of marketing the FMH but could not put a figure on such value. The other valuer simply did not engage with the question at all.

Based on what I have found above it is clear, and indeed It is common ground, that there was no express agreement or discussion between R and H and W about R acquiring an interest in the FMH by reason of her funding the construction of the Annexe. This is a case that therefore entirely turns on the proper inferences that can be drawn.

H relies on the fact that R admitted that she only realised she may have a beneficial interest following discussions with her ex-husband some way through the divorce proceedings. It was argued an agreement could not be inferred if R did not even appreciate she had in interest in the FMH. That in my view misses the point. I am sure R did not have in mind the concept of acquiring a “beneficial interest” when she funded the Annexe. Most lay people have little concept of what a beneficial interest is. However, it seems to me clear that R had a clear understanding that the Annexe was to be hers and that was why she was paying for it. That was also the understanding of H and W. That is why the clear demarcation existed as to who was to pay for what.

Moreover, the sums R was advancing were far from insignificant. She was funding a substantial construction project. These were not mere works of improvement or amenity or matters of a purely cosmetic nature. I am conscious of the warnings not to attribute all manners of expenditure to an expectation of pecuniary benefit. However, equally I cannot ignore the significant borrowings R took out to fund these works which were then paid back by the sale of her former home. I also cannot ignore the separate economy, admitted by all parties, that applied from the outset to the Annexe as opposed to the rest of the property. I accept the separation was not absolute. The utilities were paid centrally by H and W and R usually ate with the wider family. It was nonetheless significant.

Further, I cannot ignore the significant financial benefit to the value of the FMH conferred by the construction of the Annexe at R’s expense. I accept I have only the clear evidence of one valuer but there is no evidence to the contrary. I do not see that the funding of these works sits easily with the idea of a gift. Firstly, it would be an odd gift that comes with it an ongoing financial responsibility to maintain the gift. Secondly, as I have already found that R had by the time of purchase given to W the full extent of the £350,000 she was giving all her daughters, it would mean W benefitting to a greater extent than her sisters. Something that R was very clear she would not do.

Overall, in my view, the evidence points overwhelmingly to the Annexe being considered from the commencement of its construction as the separate property of R. The Annexe of course is not part of a separate legal title and forms a part, albeit a distinct part, of the wider FMH. That in my judgment leads inevitably to the conclusion that R, by being understood to be the “owner” of the Annexe, must have been understood to have some interest in the wider FMH referable to the extent of the Annexe and that is the inference, on the evidence, I draw.

Having inferred an agreement R was to have some interest the next question is to establish whether there was detrimental reliance by R. That in my view is a simpler question. There was clearly significant financial expenditure by R funding the construction and fit out of the Annexe. Moreover, she has continued to be liable for and met the cost of structural repairs thereto. She has had to borrow money at a commercial rate to fund this. It was argued by H that as R was able to rent out her home at a higher rate than the amount of the loan repayments there has been in fact no detriment overall. This ignores the fact that had R not constructed the Annexe she could have lived in the unextended FMH and kept all the rental income. Her ability to rent her home was not premised on her paying for the Annexe. It also ignores the fact R subsequently sold her former home after the Annexe was completed. Presumably on the understanding the Annexe was hers. On the facts of this case I have no hesitation in finding detrimental reliance.

The final question is the extent of R’s interest. This is not an easy question. I am of course at this stage entitled to look at the whole course of dealing including matters such as the payment for the improvement works for the garden that in my view would not of themselves give rise to any inference of an interest.

It was urged on me by R’s counsel that I should aggregate all R’s expenditure, including the initial contribution to the purchase price of £130,000, in the sum of £242,796.13. That equates to 15.77% of the current overall value of the FMH and is thus the interest I should find. It was said this was an application of resulting trust principles. There are a number of obvious difficulties with that approach, not least the inclusion of the £130,000 that I have found to be a gift. Putting to one side that in my view resulting trust is not the proper basis for analysis, it also ignores that shares in a resulting trust are calculated by reference to the proportion of the contribution to the purchase price, not the current estimated sale price. A 2013 contribution cannot be assessed against a 2025 value. It fails to account for growth of the value of the investment over time. It is particularly difficult as here where the contributions come over a number of years and there are thus a number of possible valuation points. There is also the fact that money spent does not always equate to value added.

On behalf of H, in the event I am against him on the principle of R having a beneficial interest, a similar calculation is proffered but this time deducting the £130,000. This produces an interest of 7.3%. However, the same difficulties of course arise, as set out above, by comparing historic contribution to a present value. Whilst such an approach, suitably adjusted, may be a useful cross-check I do not propose using it as the sole computation method, as urged upon me.

Another approach is of course to look at the value added as against the current valuation. I have already set out above that the only evidence I have suggests the Annexe has added £200,000 to the current value. This would equate to it representing 13% of the current gross value. This was R’s fall back position in closing. However, I accept the evidence for that is found in only one estate agent’s valuation. As such it is somewhat fragile or uncertain.

Standing back this is a case where in my view it is difficult to infer an agreement as to the extent of shares. Rather like the case of Graham Yorke v York [2015] EWCA Civ 72 this is a case where it is more honest to say the court is at this stage imputing shares based on a holistic view of R’s contributions and how they have benefitted and added to the FMH. It is my judgement that the figure this produces for R’s interest is 12% of the net proceeds of sale, which equates to approximately 10% of the gross proceeds of sale, and that is the share I find.

For the purposes of these matrimonial proceedings therefore 88% of the net equity is to be considered as a matrimonial asset and 12% to be attributed to R. Given the agreed net equity in the FMH is £1,332,577 this equates to approximately £160,000 for R and the rest being part of the matrimonial pot.

That is however not entirely the end of the matter. For the evidence of both R and W was that R will apply her share to assist in re-housing herself and W should such be necessary. So having removed the 12% from the asset sheet it potentially comes back into play when considering housing resources. Hence the circularity I refer to above. I will return to this when considering housing needs below.

Further, the fact R has a beneficial interest, and thus a right of occupation in the FMH pursuant to s.12 Trusts of Land and Appointment of Trustees Act 1996 (“ToLATA”) is not by any means an absolute bar on an order for sale of the FMH. I will consider the impact of R’s right of occupation below when considering an order for sale.

As I have found R to have a beneficial interest in the FMH, and thus a right of occupation pursuant to s.12 of ToLATA, it is not necessary for me to consider whether a right of occupation by reason of a Re Sharpe type equity arises.

I now turn to the costs of the argument as to beneficial ownership. The costs rules that apply to this aspect of the dispute, essentially between R and H, are not the general costs rules for financial remedies in FPR 28.3. Rather the “clean sheet” principle applies to this type of dispute.

Although under the “clean sheet” principle it is not axiomatic that costs follow the event it is clear on the authorities that that is the starting point. As Wilson LJ (as he then was) said in Baker v Rowe[2010] 1 FLR 761 at para [25] “Even where the judge starts with a clean sheet, the fact that one party has been unsuccessful, and must therefore usually be regarded as responsible for the generation of the successful party’s costs, will often properly count as the decisive factor in the exercise of the judge’s discretion.” InSolomon v Solomon[2013] EWCA Civ 1095 at[22]Ryder LJ stated “The starting point for what are described as “clean sheet” cases is that costs follow the event”. Finally in W v W[2015] EWHC 1652 (Fam) Blair J said “Where the “clean sheet” position pertains….there was some discussion as to whether the success or otherwise of a party should be taken as the “starting point”. In Baker v Rowe [2010] 1 FLR 761, there was a difference in emphasis between Wilson LJ at [25], and Ward LJ at [35]. However, the matter was settled (in this court's view) in Solomon v Solomon [2013] EWCA Civ 1095 at [22], where Ryder LJ states that, “The starting point for what are described as “clean sheet” cases is that costs follow the event”. In any case, it is not in dispute that this is an important factor for the court to take into account (on the facts, Ward LJ treated it as a factor of “overwhelming weight” in Baker v Rowe.)”

Beyond success or otherwise the factors to be taken into account are those as set out in CPR 44.2(4) (as applied by FPR 28.2) namely:

“Conduct” is further defined in CPR 44.2(5) as including:

FPR 2010, PD 28A para 4.4 adds to r 28.3 (in importing CPR 44.2(5)) that in considering the conduct of the parties for the purposes of r 28.3(6) and (7) (including any open offers to settle), the court will have regard to the obligation of the parties to help the court to further the overriding objective (see r 1.1 and r 1.3) and will take into account the nature, importance and complexity of the issues in the case.

Bearing all of these matters in mind it seems to me:

Taking into account all of the above it seems to me that R should in principle have 70% of her costs as against H.

I do not propose to make a separate costs order in favour of W. In this regard I note:

Despite the length of the hearing I am asked to summarily assess the costs of the beneficial interest claim. This seems to me entirely sensible and pragmatic and this approach is not opposed. R has filed an N260 seeking total costs of £20,153.40. In all the circumstances these costs are relatively modest. I do not propose to analyse the N260 on a line by line basis. Acknowledging the rough and ready nature of such an assessment I propose to summarily assess R’s total costs in the sum of £18,000.

On the basis I have found that in principle R should be entitled to 70% of her assessed costs, and subject to any matters brought to my attention in respect of WP offers, I will make a costs order in R’s favour against H in the sum of £12,600.

I now turn to H and W’s open positions before me on the financial remedies claim. They are as set out in the table below:

Beyond the well known statutory criteria in s.25 of the Matrimonial Causes Act 1973, which I of course have in mind, the general legal principles in financial remedy cases have been helpfully summarised by Peel J in WC v HC [2022] EWFC 22 as follows:

“i)

As a matter of practice, the court will usually embark on a two-stage exercise, (i) computation and (ii) distribution; Charman v Charman [2007] EWCA Civ 503.

ii)

The objective of the court is to achieve an outcome which ought to be "as fair as possible in all the circumstances"; per Lord Nicholls at 983H in White v White [2000] 2 FLR 981.

iii)

There is no place for discrimination between husband and wife and their respective roles; White v White at 989C.

iv)

In an evaluation of fairness, the court is required to have regard to the s25 criteria, first consideration being given to any child of the family.

v)

S25A is a powerful encouragement towards a clean break, as explained by Baroness Hale at [133] of Miller v Miller; McFarlane v McFarlane [2006] 1 FLR 1186.

vi)

The three essential principles at play are needs, compensation and sharing; Miller; McFarlane.

vii)

In practice, compensation is a very rare creature indeed. Since Miller; McFarlane it has only been applied in one first instance reported case at a final hearing of financial remedies, a decision of Moor J in RC v JC [2020] EWHC 466 (although there are one or two examples of its use on variation applications).

viii)

Where the result suggested by the needs principle is an award greater than the result suggested by the sharing principle, the former shall in principle prevail; Charman v Charman.

ix)

In the vast majority of cases the enquiry will begin and end with the parties' needs. It is only in those cases where there is a surplus of assets over needs that the sharing principle is engaged.

x)

Pursuant to the sharing principle, (i) the parties ordinarily are entitled to an equal division of the marital assets and (ii) non-marital assets are ordinarily to be retained by the party to whom they belong absent good reason to the contrary; Scatliffe v Scatliffe [2017] 2 FLR 933 at [25]. In practice, needs will generally be the only justification for a spouse pursuing a claim against non-marital assets. As was famously pointed out by Wilson LJ in K v L [2011] 2 FLR 980 at [22] there was at that time no reported case in which the applicant had secured an award against non-matrimonial assets in excess of her needs. As far as I am aware, that holds true to this day.

xi)

The evaluation by the court of the demarcation between marital and non-martial assets is not always easy. It must be carried out with the degree of particularity or generality appropriate in each case; Hart v Hart [2018] 1 FLR 1283. Usually, non-marital wealth has one or more of 3 origins, namely (i) property brought into the marriage by one or other party, (ii) property generated by one or other party after separation (for example by significant earnings) and/or (iii) inheritances or gifts received by one or other party. Difficult questions can arise as to whether and to what extent property which starts out as non-marital acquires a marital character requiring it to be divided under the sharing principle. It will all depend on the circumstances, and the court will look at when the property was acquired, how it has been used, whether it has been mingled with the family finances and what the parties intended.

xii)

Needs are an elastic concept. They cannot be looked at in isolation. In Charman (supra) at [70] the court said:

"The principle of need requires consideration of the financial needs, obligations and responsibilities of the parties (s.25(2)(b); of the standard of living enjoyed by the family before the breakdown of the marriage (s.25(2)(c); of the age of each party (half of s.25(2)(d); and of any physical or mental disability of either of them (s.25(2)(e)".

xiii)

The Family Justice Council in its Guidance on Financial Needs has stated that:

"In an appropriate case, typically a long marriage, and subject to sufficient financial resources being available, courts have taken the view that the lifestyle (i.e "standard of living") the couple had together should be reflected, as far as possible, in the sort of level of income and housing each should have as a single person afterwards. So too it is generally accepted that it is not appropriate for the divorce to entail a sudden and dramatic disparity in the parties' lifestyle."

xiv)

In Miller/McFarlane Baroness Hale referred to setting needs "at a level as close as possible to the standard of living which they enjoyed during the marriage". A number of other cases have endorsed the utility of setting the standard of living as a benchmark which is relevant to the assessment of needs: for example, G v G [2012] 2 FLR 48 and BD v FD [2017] 1 FLR 1420.

xv)

That said, standard of living is not an immutable guide. Each case is fact-specific. As Mostyn J said in FF v KF [2017] EWHC 1093 at [18];

"The main drivers in the discretionary exercise are the scale of the payer's wealth, the length of the marriage, the applicant's age and health, and the standard of living, although the latter factor cannot be allowed to dominate the exercise".

xvi)

I would add that the source of the wealth is also relevant to needs. If it is substantially non-marital, then in my judgment it would be unfair not to weigh that factor in the balance. Mostyn J made a similar observation in N v F [2011] 2 FLR 533 at [17-19]

As this case is concerned with a private business valuation I also remind myself of the jurisprudence in this area. This is helpfully summarised in the recent judgment of Peel J in BR v BR [2025] EWFC 99. The following principles emerge:

Finally, there is of course a live issue as to whether the FMH should be sold. Where only the interests of H and W are engaged this involves a straightforward consideration of the s.25 criteria only. Where however the asset being sold involves a third party interest s.24A(6) of the MCA 1973 states as follows:

“6)Where a party to a marriage has a beneficial interest in any property, or in the proceeds of sale thereof, and some other person who is not a party to the marriage also has a beneficial interest in that property or in the proceeds of sale thereof, then, before deciding whether to make an order under this section in relation to that property, it shall be the duty of the court to give that other person an opportunity to make representations with respect to the order; and any representations made by that other person shall be included among the circumstances to which the court is required to have regard under section 25(1) below.”(emphasis added)

Perhaps strangely given this provision has been in force since 1984, having been added to the original s.24A by the Matrimonial and Family Proceedings Act 1984, neither myself nor counsel could find any reported case which has discussed how the representations of the third party should be balanced against the needs of the spouses. Still less what representations may be particularly pertinent.

By reference to s.25(1) it would appear that the interests of minor children of the family will be given precedence but beyond that there is little guidance in the statute. The factors in s25(2), tailored as they are for the issues between the spouses, seem somewhat inapt in any balance as between spouses and third parties.

In respect of investments or purely commercial property where a third party has an interest the issue is likely to be less vexed. Any sale will merely realise the third party’s interest, which of course cannot otherwise be invaded by the matrimonial court, which may then be invested elsewhere. However, in respect of domestic property, particularly where that property is also the home of the third party the balance may be more difficult.

It seems to me that in considering the exercise of this power the following non-exhaustive factors are likely to be pertinent:

Ultimately it is important to recognise that section 24A is an ancillary provision to other substantive matrimonial orders such as lump sums or property adjustment orders. It thus is, or at the very least is analogous to, a form of enforcement. In these circumstances it seems to me that a useful analogy can be drawn with applications by creditors pursuant to charging orders under ToLATA. In these applications there is often a non-judgment debtor third party who has an interest in the property which is also their home. There the case law is relatively clear, see for example Mortgage Corporation v Shaire [2001] Ch 743 and Bank of Ireland v Bell [2001] All ER (Comm) 920, that if there is no other way in which the debt can realistically be paid the interests of the third party co-owners will rarely prevail so as to prevent a sale.

Given the emphasis on fairness in all aspects of discretion under the MCA 1973 the family court may be a little more indulgent than that civil line of authority, which of course is applying different statutory criteria. However, it seems to me that where there is little other prospect of substantive relief between spouses being possible absent an order for sale then it will rarely be the case that the objections of third party will prevail absent some special factor in the personal circumstances of the third party.

I now turn to the assets in the case. There is before me an ES2 that is largely agreed save the two issues averted to above in respect of H’s business and the X Country properties.

The equity in the FMH is agreed in the sum of £1,332,556. As I have found that 12% of this belongs to R the amount that is matrimonial amounts to £1,172,649. This is by far the most significant matrimonial asset.

There are then minimal sums in bank accounts which I propose effectively to ignore.

The next most significant asset is H’s company V Limited. This has been the subject of great dispute. There have been two reports from the SJE Sally Longworth, the first in December 2024 and the second in July 2025. In addition I have heard live evidence from Sally Longworth who has been cross-examined on the content of these reports.

It is perhaps unfortunate that there is significant difference in the value attributed to V Limited in these two reports given they are just over 6 months apart. The first gives the value of the business as £239,000 gross (£209,000 net) and the second £146,000 gross (£123,000 net). The decline being based on updating accounts showing a considerable decline in turnover and also a decline in profit. I shall return to the reasons for this in due course. This has understandably aroused the suspicions of W who essentially argues I should accept the conclusions of the December 2024 report and discount the conclusions of the July 2025 report. She seeks to argue that H has effectively soft pedalled on the business of late so as to depress its value.

However, it is important not to lose sight of a number of crucial factors about V Limited:

In this regard it is perhaps regrettable that so much time and money has been taken up with arguments about V Limited’s valuation, though I do accept that the issue as to H’s realistic sustainable income is a live issue on the subject of maintenance.

V Limited is involved in the provision of automated systems for homes and buildings, controlling such things as heating, lighting and ventilation. H essentially builds these systems at home in his workshop. They are then installed in developments of various scales where V Limited is retained as a contractor. H’s specialism uses an automation protocol known as U. I was also told of another automation protocol called Z. H is not experienced in the Z system himself. However, through sub-contracting for a company called B, H met Mr J who is experienced with Z. Mr J came to work with H through V Limited, initially as an employee but thereafter as a contractor. Being able to bid for Z contracts, predominantly through B and Mr J’s connections thereto, allowed V Limited to expand significantly and increase its turnover. However, it also increased its costs.

The change in the financial position of V Limited can be seen in the table below which I take from Sally Longworth’s most recent report:

I was initially sceptical of this significant turnover decline at the time of divorce proceedings. However, having heard H’s evidence I accept that the decline in turnover has been as a result of the dropping off of the work he was doing with B and accordingly the work done with Mr J. This was largely as a result of major projects coming to an end. H explained that he felt uncomfortable bidding or being involved in further Z contracts as this was outside his comfort zone and meant he had to retain other contractors familiar with the system. It also meant that his overheads went up significantly in ways which were hard to control. In this regard I note that, save for the current year, that the highest profits were in the year, 2020, which had the lowest turnover. Indeed, the figures for net profit present a slightly different picture to that gleaned from turnover alone. It is clear the reason for the likely loss this year is the unusually large sums being taken out the company, likely to pay for these proceedings.

In his evidence H struck me as relatively upbeat about the future of his business and his ability to find new U work. He still stood in broad brush with his earlier prediction that annual turnover going forward could revert to the c£350,000 he had initially predicted, which is higher than the current year end projection. In the end I got the picture this was not someone deliberately running down his business for forensic advantage. His optimism going forward was not the presentation of someone setting out to misleadingly do down the business’s prospects. Though it is likely, given H is essentially the business, that the fact of these proceedings and their inevitable toll will have had some impact on H’s focus on business matters and thus the business performance.

Turning now to the valuation of V Limited by Sally Longworth, these have been carried out on a fairly standard EBITDA basis with current debts and directors loan added on. Sally Longworth was clear in her evidence that the business could ultimately be sold – despite the extent of H’s involvement – the value being in its client book, goodwill and any ongoing contracts. I broadly accept that evidence. Sally Longworth did however also accept that any buyer would likely insist on fairly strenuous non-compete warranties from H. In my view these would effectively prevent H from working in this specialist sector for a number of years unless he was to geographically relocate. Something about which I had no evidence and seems to me highly unlikely. Thus, it seems to me therefore that any sale is unlikely before H considers retirement.

As with all EBIDTA calculations it is possible to quibble with some of the allowances and deductions. Sally Longworth accepted some of these quibbles in cross examination. However, she stood by her overall valuation. In particular she made clear that any understating of the multiplicand for realisable profit was probably offset by the retention of the slightly higher multiplier from her initial report despite the company looking less financially healthy.

Time was also taken exploring a debt owed to V Limited by G. H seeking to argue it was potentially overstated and may not be paid at all and W arguing that the non-payment of this invoice had been manipulated in some way. I am not sure these arguments add anything significant and the approach of Sally Longworth in discounting the debt by 50% seems to me to be entirely appropriate.

Overall bearing in mind the uncertainty of any private company valuation, and conscious of the nature of this business, I accept the capital value put on it by Sally Longworth in her most recent report at £123,000.

I am asked by H to apply a further court discount to this figure to take into account liquidity issues. As set out above that is not a matter for the computation phase. If appropriate it is something applied when considering sharing and the different nature, liquid or illiquid, of the assets shared. I will therefore consider this further when dealing with distribution.

As to the the likely income V Limited will generate I will deal with this when considering the position in respect of the parties’ income capacities.

The next computation issue I can deal with fairly shortly. This relates to the two real properties in X Country. These were rental properties transferred to H by his parents and subject to a usufruct. There is expert evidence now by way of letters from two X Country lawyers: one on behalf of H and one on behalf of W. In respect of all material matters their evidence is, in my view, essentially the same and can be summarised as follows:

At the very end of last year/beginning of this year H’s parents activated the provision requiring the return of the properties on the basis of H’s divorce. They were thus transferred back to H’s parents. W sees this as a device and manipulation by H to reduce the capital that he has available.

It is, of course, always unfortunate when spouses divest themselves of legal title to property in the midst of divorce proceedings. The other spouse is almost certain to assume some form of bad faith or manipulation. However, in this case, it seems to me, the transfer has had virtually no practical effect for the purposes of these proceedings. The properties themselves were clearly non-matrimonial in nature. More importantly, whilst subject to the usufruct in H’s parents’ lifetimes they were entirely illiquid and H derived no financial benefit from them, for all of the income was being paid to his parents. There is no suggestion both H’s parents are at death’s door or were otherwise willing to give up this income, so there is no reasonable expectation that the usufruct would have come to an end in the near future so that the properties vested outright in H.

It was suggested on behalf of W that were it not for the recent transfer the properties may have been able to be mortgaged in some way to raise money for H – I presume to go to H’s rehousing. In my view that is highly unlikely. Firstly, I doubt such property could be mortgaged without the express permission of the parents. Secondly, as H did not benefit from the rental income there would be no way for him to make repayments of any lending – absent resorting to his income elsewhere or his parents agreeing to sacrifice part of their income – thus the whole scheme would be impractical and a mortgage lender extremely unlikely to lend.

In any event as the properties have now been transferred back to H’s parents any such borrowing is entirely theoretical. Furthermore, there is, sensibly, no application to set aside the transfer back to the parents, that it appears they were legally entitled to demand.

In all the circumstances the X Country properties should no longer be on the asset schedule, or even if they remain notionally, they should be shown as having a zero value.

Before leaving computation I should briefly refer to the parties’ debts. There is some dispute about these. Both parties have clear hard debts in respect of litigation funding loans and outstanding legal fees. The amount to £80,483 for H and about £102,500 for W. In addition, H and W have modest bank loans (about £6,800 for H and £3,502 for W). I do not take into account H’s HP liability for his car which does not immediately fall due.

H in addition makes reference to his tax liabilities, most of which are not currently due for payment. I do not doubt these sums will need to be paid in due course, but in my view these are a product of income. Save for the existing outstanding tax debt of £14,079. I do not propose to treat them as separate standalone capital debts that require immediate repayment.

H also has a Director’s Loan account, and whilst this will ultimately have to be repaid, H and V Limited his company will have a degree of flexibility about how this is met. In my view as this has been taken as part of the value of the company it is best treated as offsetting that value rather than as a liability in need of immediate repayment. Again, I do not propose to treat it as an immediate capital liability. I therefore propose to treat H as having approximately £101,000 that requires immediate repayment.

I appreciate in addition H now has an additional liability to R by virtue of the costs order I have made. It would however be totally wrong to take that into account in the computation exercise as between H and W.

Finally, W has an alleged loan from her mother. This is not evidenced in any detail and is in my view a soft loan which will not be immediately pursued. I therefore treat W as having aggregate hard debts as set out above in the sum of £106,000.

I have in the usual way been provided with property particulars by both parties. W puts her housing needs in the first instance as the retention of the FMH for a period of about 3 years. In the alternative she puts her housing needs as being substantial 5/6 bed properties with values between £1.175 million and £1.3 million. It is common ground that such properties would have to accommodate R as well. It is also common ground that W has no mortgage capacity and thus the entirety of purchase costs would have to come from the proceeds of sale of the FMH. It is thus immediately apparent that the properties W proposes are unaffordable. For they would essentially exhaust, and indeed likely exceed, all the liquid capital in the case

In her oral evidence W admitted she had seen one property that was potentially suitable as £800,000 but felt this was the absolute bottom of what she would be able to find. This is obviously somewhat below the range W had initially suggested.

H by contrast has produced properties for W in the K area for about £700,000. These are 4/5 bedroom properties but much less desirable than the properties W suggests for herself. On examination, a number of them may not have been suitable for R because of their layout. There was much debate about the need for rooms for all the children. Save for P all the children continue to live in the family home. Q and D are working, S has just finished university and T is still in school. In practice it seems to me at most 2 further rooms are required in addition to rooms for W, R and T. As even W acknowledges the older children will soon move out permanently.

Housing needs do not of course exist in a vacuum. They must be tempered by the resources available. Doing the best I can I believe the range H suggests is a little on the low side but much closer than the range suggested by W. In my view W should be able to rehouse adequately at about £750,000. This will allow for the purchase of 4/5 bed home. In addition, it is likely any property she buys will need to be adapted for R. This will be a further cost. H puts forward a figure for such adaptions at £15,000. There was no evidence to the contrary and I accept this figure. In addition to the purchase price and adaption costs there will of course be stamp duty and purchase/moving costs. Stamp duty on a £750,000 property comes in at £27,500 and I allow a further sum of £7,500 for purchase/moving costs. This in total gives W a need for a housing fund of £800,000.

As I have already noted above the money that R receives from the FMH will be applied to assist in purchasing the next home in which she lives in with W. I therefore deduct R’s share of the proceeds of sale, £159,906, from the housing need that W must find from matrimonial funds. This leaves a sum of £640,094 that must come from matrimonial funds.

As far as H’s housing need is concerned he puts forward particulars for himself in the range of £612-625,000 for 3 bed properties. He asserts the need for a built-in garage/workshop for the purposes of his work. W puts forward particulars in the range £380-£495,000. These are also 3 bed properties but less desirable. In particular, those that have garages have them as part of a block. This H says is unsuitable because of security concerns for his work. Again, doing the best I can and having mind to the available resources I find H’s housing need to be for a house priced at £490,000, thus at the top of W’s range. I again add stamp duty and moving costs at £14,500 and £5,500 respectively. I give H slightly less under this last item than W as it will only be him moving whilst W will need to move herself, the children and R including all of their effects. Thus, I assess H as needing a housing fund in the sum of £510,000.

This has again been a bone of much contention. Dealing first with H. From Sally Longworth’s most recent report she suggests that H has a maintainable income of c£83,000. This is based on maintaining a base salary of £78,000 and drawing additional dividend income of £5,000. This is a considerable reduction on the figure in her earlier report when she concluded that H had maintainable earning of £145,000.

It is also in contrast with the actual figures taken out of the company by H and W combined in the past few years (W will of course no longer be an employee going forward). These figures amount to 2022: £108,400; 2023: £91,600; 2024: £220,412 and 2025: £135,000. The last two figures, and in particular 2024, seem to me however something of an outlier

I also note that the figure Sally Longworth gives for maintainable earnings is reduced by a one off final payment of a bounce back loan this year. That reduces the likely dividend from £15,000 to £5,000. Without that one off deduction the sustainable income increases immediately to £93,000 going forward even on Sally Longworth’s figures.

I entirely accept that the recent amount of withdrawals from V Limited have been unsustainable. The bulge in the withdrawals unsurprisingly coincides with these proceedings and the costs the parties have inevitably incurred. There is also almost certainly some impact on the company’s performance in recent times by the inevitable distracting nature of all these proceedings. That is not necessarily deliberate reduction in any way by the husband but merely the inevitable consequence of the unhappy situation.

Overall, however I find that H’s likely earning capacity from V Limited going forward is understated somewhat in Sally Longworth’s recent report at only £83,000. W’s contention for £145,000 however, in my view, overstates the position. Doing the best I can in my view H has a sustainable income going forward of c£95,000 gross. This is just above Sally Longworth’s figure stripping out the one off bounce back loan repayment. It also factors in H’s optimism about the business future and the fact H will no longer be concerned with the distraction of these proceedings. It is also in my view consistent with the figures H has historically been able to withdraw from the company, in salary to himself and W and dividends, save for the most recent and rather exceptionally years which after all have put the company into short term loss.

My figure of £95,000 is based on him continuing to receive £78,000 of this by way of salary and the balance, £17,000, by way of dividend. This gives a net income of £67,228 or £5,602 per month. This is the figure for H’s income I propose to use.

As far as W is concerned the position is more difficult. She has no recent earning history save for the money paid by H’s company. She is 58 years old and re-entering the labour market. In my view the suggestion by H that she can go back into full time employment at c£24,000 net immediately is wholly unrealistic.

On the other hand W’s contention she will only be able to work part time because of caring needs for R and the children is equally unrealistic. Without being unfeeling it may well be R has to resort to finding carers and arrange the funding thereof where W needs to work.

In my view W is likely at the outset to have a modest income of c£1,250 pcm net but certainly within three years that should be able to be increased to closer to £1,750 pcm net and hopefully more thereafter.

I have not had exhaustive examination of budgets in this case. W has submitted a budget of £4,294 per month. This is not an excessive budget but there is likely to be some fat on it and I would reduce it in broad brush to £3,850 per month. On the basis of agreed CMS maintenance at £687 and assumed income of £1,250 as discussed above this leaves a monthly shortfall of £1,913. Given R and at least some of the adult children, who work, will be living with W I would expect some modest household contribution from them. I would not however put this at more than £200 per month. This still leaves a shortfall of £1,713. Of course, such precision is illusory, and I would round up such shortfall to £1,750 per month. That seems to me the income need of W, subject of course to H’s availability to meet it.

As far as H is concerned, he has put in a budget of £4,064 excluding mortgage and maintenance. For in effect a single person this seems to me very high, if not wholly unrealistic. For with the addition of his accepted likely mortgage payments, £1,579 as discussed below, it would effectively account for all of H’s net income even at the higher rate I have found of £5,602. It would leave nothing for child and spousal maintenance – which even in his open offer H suggests should be c£1,427 per month going forward. His numbers thus don’t add up.

In my view H’s realistic budget after mortgage payments is about half this amount - c£2,000 - and in the short term at least he could probably get by on less. There is no realistic comparison with W’s budget for a much larger home with the full-time care of the parties remaining minor child and the recently adult children transitioning towards independence.

As set out above it is common ground W has no mortgage capacity. The position of H is more debateable. H puts his mortgage capacity as £185,000 based on an income of c£80,000 and spousal maintenance of £1,250 per month. This is contained in a number of calculations in a detailed letter from Lyons Finance, a mortgage broker, dated 14 January 2025. This letter also contains a calculation based on an income of £145,000, the figure then suggested by Sally Longworth. W continues to rely on this higher figure. On this basis the broker calculated he could borrow up to £424,000, again based on £1,250 per month.

In my view the mortgage capacity of £185,000 is about right and is the one I will take. I have assessed H’s income as above the figure of £80,000 at about £95,000 going forward. It is also true that the last year’s accounts will show a sizable salary and dividend and it is these past figures that will be used to calculate what can be borrowed. So it may be possible for H to borrow more than this sum. However, I must not lose sight of affordability going forward. It would not be right to expect H to borrow more than he can reasonably afford. H will be paying significant maintenance at the outset, as set out below. This is at a higher figure than the assumption of £1,250 a month. In my view the understated income is likely balanced out by the understated overheads. Given H’s age and the other affordability factors a crude use of income multipliers would be wholly inappropriate in this case. I therefore err on the side of conservatism in the mortgage capacity I find.

I will deal first with the FMH. In my view it is wholly impractical for W to retain the FMH. I am acutely conscious of the desire of both W and R to remain in the FMH for the next few years but such is simply not possible. For given there is no other liquid capital H would be left entirely out of liquid capital, unable to rehouse, and likely without a place to work for a considerable period.

This is a case where the only way to make a financial remedies order work is to make the order for sale in respect of the FMH. In doing so I am satisfied that this causes no undue disadvantage to R who I am satisfied will be rehoused with W. I note that the Annexe has been adapted for the needs of an 88 year old. However, these adaptions are of a standard nature and it was not seriously argued such could not be adopted in another suitable property. I do not underestimate the strain of a move for R but this is not a case where her personal circumstances are of such an exceptional nature that they should prevent or postpone a sale. In another case, where other capital resources existed, R’s circumstances might tip the balance against a sale but here there is simply no other option.

As far as rehousing is concerned I have already found that W will need a global housing fund of £800,000 but that R will contribute her share of the proceeds of the sale of the FMH to such fund. This leaves a shortfall for W of £640,094. In addition W has £106,000 of hard debts that will need to be met from capital. W thus has a total capital need of £746,094. The only source from which this can be met will be the net equity in the FMH. This equates to 56% of the net equity.

This leaves H with 32% of the equity. This equates to £426,417.92. This combined with his mortgage capacity of at least £185,000, and less his immediate debts of £101,000, will allow him a housing budget of £510,000 which will meet his needs as I have assessed him.

I appreciate that H will have a separate costs liability to R. This will of course impact on his needs but that is an unavoidable consequence of the order and H will have to cut his cloth accordingly. It would be inappropriate for me to revisit W’s needs in light of that award

As far as maintenance is concerned I have already assessed W as having a current shortfall of £1,750 per month. H by contrast has a net income by my assessment of £5,602 per month. Out of this he will have to pay child maintenance at £677 per month. He will also have to meet mortgage payments of £1,579 by his broker’s calculation. Though this could be reduced in the short term by taking an interest only product. On the face of it, however, this only leaves H with a net income of £1,596. I appreciate this may be tight, and is less than my view of his realistic budget, but in my view he will be able to make do at least in the short term. His spousal maintenance commitment is approximately 31% of his net income and his global maintenance obligations amount to 43% of his net income.

Of course, I am more than conscious that this maintenance should only be for so long as is needed to allow W to adjust without undue hardship. I have already found that I believe W can increase her earnings within a three year period. This justifies a step down after that period. By that stage T will have completed school. So, in three years’ time I would expect the maintenance to reduce to £1,250 a month. Thereafter there should be a further step down after a further two years to £750 a month. This should last for a further two years, after which maintenance will come to an end. By the end of this period T will likely have finished tertiary education and W may well be in a position to downsize. R may or may not still need to be accommodated with W at this point.

In my judgment a stepped reduction in maintenance over 7 years strikes the right balance between the need to seek a clean break and the need for W not to be left in a position of undue hardship. A clean break in 3 years as suggested by H and potentially 10 years as suggested by W in my view fail to strike that balance. I appreciate it will not be easy for W to become financially independent and in the early years it may not be easy for H to meet the payments. The balance of hardship for both parties however seems to me the right one in the circumstances.

Given the element of uncertainty in respect of W’s position I feel that whilst a stepped term order is appropriate a s28(1A) bar on any further extension is not. W would face a high hurdle on any application to extend but I feel to rule out such completely at this stage would be wrong. This is particularly the case where W’s pension provision is so modest.

The capital effect of the orders I propose will be to leave the parties with the following assets (ignoring chattels and the small amounts in personal bank accounts):

It will be apparent from the above I have not added a further court discount to the value of H’s company as was urged upon me. In my view such is entirely unnecessary in a case like this which turns entirely on needs and there is no surplus to be shared. The value is merely relevant if at all to this cross check.

The fact that the outcome is driven by needs also renders examination of the respective contributions by way of gifts from H’s parents on the one hand and W’s parents on the other entirely academic, save of course for the question of R’s beneficial interest discussed above.

So taking the figures above by way of cross check, the total division of all assets leads to a 42:58 division in favour of W. The departure from equality is solely based on W’s needs. As set out above I am satisfied that both parties needs are adequately met by this division and once such needs are met there is simply no surplus. I am thus further satisfied that overall the proposed division is fair.

I come finally to the question of costs. This is a case where FPR 28.3 applies and the default position is no order as to costs. However, the court can still make a costs order if it is of the view the conduct of one of the parties in relation to the conduct of the proceedings makes a costs order appropriate.

H argues that in respect of a number of matters W had engaged in litigation misconduct. Many of these relate to earlier hearings. No substantive costs orders were made at these hearings though matters were reserved to the trial judge and thus myself. I can see some force in some of the criticisms in respect of the large number of applications made by W. In particular she applied for valuations of the X Country properties and for freezing orders in respect of V Limited. These applications do seem somewhat disproportionate. On the other hand, the applications by the intervener, R, have been found to be justified, and the applications for SJE valuers were ultimately allowed and I have found helpful. The changes in H’s business model leading to two separate SJE reports, within a matter of months, is not a matter I can attribute to fault on the part of W.

I appreciate there is an element of W’s open position that is unrealistic re the sale of the FMH. However, it would be wrong not to ignore the difficulty with it also being her mother’s home. I also am sceptical that but for that issue the case would have likely settled. Neither party has come close to their open positions.

Fundamentally, however, even if I were persuaded there had been an element of misconduct in this case the real difficulty is that I have already pared back needs as much as I feasibly can in respect of both of the parties. There is only just enough to go round and neither party has any surplus. There is simply not enough money available as between H and W to fund costs orders.

Thus in my view the correct order for costs as between H and W is no order as to costs.

In light of all of the above the order I propose to make is as follows:

I will hear counsel, by email, as to how the existing arrangements for the payment of overheads referable to the FMH shall be adjusted, in light of the maintenance ordered above, pending the completion of the sale of the FMH. Clearly there will need to be some adjustment. I will also adjudicate on any ancillary matters arising in respect of the draft order.

Finally, I would wish to thank all counsel for their assistance in what has not been a straightforward case.

Since circulating this judgment in draft, I have been made aware of the following matters in respect of WP offers save as to costs, and also attempts at ADR:

As to the former given the generic nature of the attempts at ADR and the fact such related to the global issues between H and W, rather than the specific matters in respect of R’s intervention, these have no impact on my decision on costs.

As to the latter this is potentially relevant to the issue of costs between R and H. However, I note the following:

Had this offer been made in early course it may have had an impact on my costs’ decision. However, in light of its proximity to trial and the fact R has not done better at trial, I not propose to revisit my preliminary adjudication upon costs. Therefore, as outlined above, R will receive from H 70% of her costs as assessed in the amount of £12,600.

I will adjudicate upon any ancillary matters as to the timing of payment of these costs upon short submissions by email.

In accordance with the President of the Family Division Guidance – Citation of Authorities: Judgments of Circuit Judges and District Judges (2025), and with the approval of the FRC leadership judge Mr Justice Peel, this decision may be cited as an authority in respect of the exercise of powers of sale pursuant to s.24A of the Matrimonial Causes Act 1973 where the interests of a third party co-owner need also to be considered.