IX v IY

On 12 September 2013, IX married IY in The Principality. By the time they married they had been in a relationship for some years, they having met in 2006. The wife is a former model who had not worked since 2003 in any formal capacity, although she had undertaken some commission-based work in relation to property and jewellery sales, and had a daughter WD, who was seven years old at this point. The husband is a software engineer by training and has deployed that since about 1994 in establishing

The agreed asset schedule shows that the sum which falls to be divided between the parties is either £38,946,372 (the wife’s estimation) or £38,274,048 (the husband’s estimation).

The wife seeks a lump sum order totalling £16 million (plus the discharge of her litigation loans of around £740,000), that representing approximately 40% of the sum available; she saying that on sharing principles this is a fair proportion having regard to all the circumstances. As a crosscheck her team say that such a sum would represent her needs in any event, her needs being made up of housing in Belgravia of between £6 and £7 million and capitalised maintenance of £8.5 million (that being made up of £500,000 per annum until she is 60 and £250,000 per annum for life there after). Her open position is as follows;

The husband says that the wife’s claim should be assessed purely on a needs basis and that sharing is inappropriate in all the circumstances. He says that her housing need is currently £3.5 million and will reduce to £2.3 million in due course. He says that maintenance at £200,000 per year for the first five years, and £125,000 per year for the next five years and £100,000 per year for the remainder of her life will meet her income needs. Furthermore, taking account of equity release of £1.2 million her income needs can be capitalised at £1.6 million. He therefore offers a lump sum of £5.1 million. His open offer was (it has been tweaked slightly as set out above)

It will immediately be evident that there is a differential in the bottom lines that each party contends for of around £11.5 million. Within this there is a difference of some £3.5 million in the evaluation of the wife’s housing need and at the top end a difference of some £300,000 per annum in her income needs. But more importantly there is the fundamental difference in principle between their approaches; on the one hand sharing with a crosscheck against needs, on the other a needs approach on its own without reference to any sharing principles.

The parties provided an agreed list of issues is set out below.

The extent to which the parties’ pre-marital relationship should be treated as part of the ‘duration of the marriage’ (s25(2)(d) Matrimonial Causes Act 1973) or as one of the ‘circumstances of the case’ (s25(2) MCA 1973).

Whether the parties separated in February 2017 (per H) or September 2017 (per W)? Per H, the extent to which the answer to this question matters, beyond its potential tax impact.

Children of the Family: the extent to which this classification applies to any of the children in this case and what impact, if any, this classification may have in the section 25 exercise. (per H, no relevance; per W, relevant to assessing the pre-marital relationship and W’s and WD’s needs).

The standard of living during the marriage and the extent to which this factor may inform an assessment of need.

Available resources.

Contributions:

Sharing:

Needs:

Per W: interim maintenance:

Outcome:

I shall return to some of the parties’ more detailed submissions later in this judgment when I address the list of issues, although given the extensive written and oral submissions that I have heard I cannot hope to do anything other than identify the essential thrust of the multitude of legal and evidential arguments addressed to me.

The wife’s case in a nutshell is that this is quintessentially a sharing case. She says that from 2007 until 2013 the parties cohabited in London, The Alps, and France and that this period added to the four years of the marriage from 2013 to 2017 make this a medium duration marriage. She submits that in 2007 when the cohabitation commenced Zebra was in its early phase and was of limited value; possibly reflective only of the sums that the husband had himself invested into it. She submits that the husband has failed to disclose documentation which would enable her team to undertake any sort of detailed evaluation of the financial position of Zebra in 2007. The husband’s failure to disclose these documents which either he or his accountant must have or must have access to leads unerringly, she submits, to the conclusion that he has withheld them because they do not support his case that it was pregnant with value at that point in time. She submits that the vast majority of the value that was realised on its sale in 2017/18 was built up in Zebra from 2007 and that this was the result of the husband’s endeavours in the business over that period. She submits that whilst he made his contributions by building up the business, she made matching contributions on the domestic front by looking after her child and his children, helping in the design, renovation and furnishing of the various properties they owned, organising their lives on the domestic front and supporting him in his business endeavours both emotionally but also practically by introducing him to the social and financial elite of London, Europe and perhaps America. She submits that the evidence plainly supports her evaluation of the nature of the relationship between 2007 and 2013 and that this was truly a seamless transition from cohabitation to marriage. The relationship was committed and exclusive from 2007 and the pattern of their lives did not alter from before to after the marriage. She contributed to the children, to their properties and was prepared to contemplate seeking to adopt the husband’s son, HS. The husband’s daughter, HD, spent time with her in the summer of 2017 when the husband was away with his new girlfriend. The fact that HD saw Smith Place as her London home illustrates how close the wife was to the children. She submits that the parties led the life of an international family with homes in multiple countries, and a standard of living which involved the finest of all that money could buy albeit perhaps not at the level of the super-rich. On her formulation of her own open offer she would receive approximately 40% of the current net assets in the lump sum of £16 million. She says this is a fair share of the wealth that was generated during the time that the parties were together. She cross checks this against needs. Although she had not owned property prior to meeting the husband, Mr Cusworth QC submits that her need now is for an unencumbered property of her own. He submits that the fact that the parties owned homes in The Alps, The Principality, and France (albeit not necessarily held in their own or the wife’s name) justifies her now owning her own home. Her current home would cost approximately £6 million to buy on a relatively short lease. She aspires to buy something similar. Property particulars for alternatives she suggests range between £5 - £6.5 million pounds, giving a housing fund need taking account of stamp duty and cost of purchase of between £6 - £7 million. Her budget comes in at just under £600,000 per year, which she says is less than half of the overall rate of expenditure of the family during the marriage. She relies on a budget which she says shows annual expenditure in 2015 of €1.864 million, the equivalent of £1.341 million. She says since the separation her actual spending has been in the region of £355,000 over the year. She is currently 50 and says that her annual income need until 60 would be £500,000 per year reducing thereafter to £250,000 per year for life. Using standard Duxbury calculations, this would give a capitalised sum to generate income of £8.6 million. Thus she says an appropriate assessment of her income and capital needs gives rise to a lump-sum of £15-£16 million which demonstrates that the 40% share is also broadly comparable with her needs and thus fair.

Mr Cusworth QC on behalf of the wife submits that the husband’s contention that the entirety of the value of Zebra is a non-matrimonial asset is simply wrong. He points out that the husband was CEO from October 2008 until 2012 and continued to be a

He says that the values shown for Zebra in the 2007 and 2009 spreadsheets are unlikely to be right, they are no more than guesstimates, and I should not rely on them too heavily. The effect of this submission though is to invite me either to pluck a figure from the air as to their then value or to ascribe a percentage of the current value to the value they had in 2007; again by a broad horizon approach.

As to the value of Zebra, the husband put £500,000 in in 2007 and loaned the company £1.3 million later which was then converted from loans to equity. However, the base numbers have not been available and the husband has not produced documentation to support it. In relation to cohabitation, the husband has had access to all of the documents which would prove his case that there was no cohabitation. The limited documents the court has are as a result of the wife circumventing the password protections on the husband’s laptop and being able to take photographs of a number of documents she thought were relevant. The husband could have produced more documents to contradict the wife. Furthermore, the husband has wiped the wife’s laptop and iPad which were left in France on the basis that they were not used by her and had been reprogrammed to other functions. Mr Cusworth QC suggests that these were deliberate actions by the husband to prevent the wife gaining access to material which might have supported her case.

The husband’s approach could not be more different. Relying on case law, including the recent decisions of the Court of Appeal in Sharp v Sharp[2017] EWCA Civ 408,[2018] 2 WLR 1617 and Hart-v-Hart, [2017] EWCA Civ 1306; [2018] 2 WLR 509 he asserts not merely that there should be an adjustment to the parties’ shares because

In the alternative, he asserts that a true valuation of the business at the date of the marriage would include a significant uplift to reflect its latent potential realised during the marriage and any passive growth attributable to inactive periods, so that any increase in the value of his shares in the business generated during the marriage which might be subject to the sharing principle was consequentially reduced. Furthermore, Mr Marks QC argues that in addition to the non-marital assets (which should not be shared) that the husband made an additional unmatched (by the wife) contribution in the form of the capital he introduced to the marriage which arose from the share sale of his first business. Given that almost all of that capital amounting to some £12 million was spent on meeting the parties living expenses over the ten-year period, the husband argues that this must be taken into account either in adopting a needs-based approach to the wife’s claim or by a significant adjustment if there is to be a sharingbased assessment of the wife’s claim. He points out that the husband brought seven properties into the relationship, within two years this was down to three and not long after that it was down to one property (in France) which is mortgaged 100%. In addition, he brought in liquid capital in the form of investments and guarantees which have all been deployed in meeting the family’s living expenses.

The husband says that if he is right that Zebra is truly to be characterised as a nonmarital asset then the wife’s claim falls to be assessed by need alone. He says that it is clear from the case law that non-marital assets are not subject to the sharing principle. If that is not applicable then needs are. The husband asserts that the home that the wife currently lives in is larger than she needs given that on her case it was acquired in order to accommodate the whole family of two adults and three children. Her needs now are for herself and for visits from WD, perhaps with a live-in member of staff as well. He has put forward a number of properties in the vicinity of the wife’s present home and further afield which show that a housing fund of £3 - £4 million would generously meet her housing needs. The wife says none of them are suitable. The husband says that in due course the wife would have ample scope for later trading down to a smaller or less expensive property and thus would be able to release capital to top up her income fund. The husband characterises the wife’s budget as an ugly and most improvident starting point for an assessment of her needs. He observes that prior to the relationship in 2007 she had very little; a small lump sum from her annulled marriage, small commissions from property introductions, irregular financial support from the father of WD, and had been in rented property apparently for most of her life. He says that the 2015 budget the wife relies on in fact was produced by him to demonstrate that if the parties met that expenditure they would be overspending by a considerable sum and they needed to cut back. He does not accept that they in fact spent at that level. He says that a proper assessment of her needs, even taking account of the parties’ standard of living, would be £200,000. He submits that this is roughly what she has spent in the last 12 months and that should be a starting point; she needs time to adjust to the real world and to accept that she will not be maintained at the level she lived for the rest of her life. He cross-references this to what he submits can be attributed to the wife as her expenditure in the last 12 months, excluding rental payments. He submits that she is able to meet aspects of her income needs from her role as a brand ambassador. Thus a total lump sum of £4.85 million, which after repayment of W’s loans would leave her with about £4.4 million, which will enable her both to purchase a property and to draw income from a capital fund, which would later be topped up by the release of equity from a sale of her property.

In closing submissions, the husband altered his position slightly. He offered a housing fund of £3.5 million and assessed the wife’s income needs as £200,000 per and for five years, £125,000 per annum for five years and the remainder of her life at £100,000 per annum. The Duxbury sum to generate this income is £2.786 million. Allowing for the wife downsizing in a few years and releasing around £1.2 million would require a payment of a lump sum of £5.1 million representing £3.5 million for housing and £1.6 million for income generation to be supplemented by the release of £1.2 million at some point in the future.

This short summary masks a host of other subsidiary points which emerge from the statement of issues and to which I shall return briefly in due course.

At the conclusion of the evidence Mr Marks QC suggested that the parties submit written closing notes which would be supplemented by their oral submissions. Given that the trial template allowed for half a day each for oral submissions I declined his offer; experience suggests that this approach simply doubles the time required to consider the written and oral submissions and the trial timetable simply did not contain the additional time that would be required to digest written submissions as well as a day of oral submissions. However, I did suggest that I would be assisted by an agreed summary of the legal principles. Although the silence was not quite deafening in response to this suggestion, it was not something which the parties were able to agree to provide. As will become apparent in the remainder of this section of the judgment, although the statutory provisions are straightforward and the overarching principles outlined by the House of Lords appear designed to make the determination of financial remedy claims less complex, the reality is far removed. I was fortunate in having the assistance (within the remits of putting their client’s cases) of leading and junior counsel and solicitors whose experience is unrivalled. I was also fortunate in having a sensible time estimate in order to consider my judgment. Given that the issues of non-marital assets including business assets are likely to fall for consideration in very many cases, and where the assets are such that they exceed the parties’ needs although are nowhere near as substantial as those involved in this case, the task of District Judges (including Deputies) and Recorders and Circuit Judges up and down the country in seeking to apply the law which now derives from a myriad of cases is not an enviable one. No doubt the advent of the financial remedy court will ease the situation to some degree but for the busy Family Court Judge having to determine whether the case might be a ‘Charman (no.4)’ case where awarding less than one third of the assets would be entering dangerous territory, or how the ‘springboard’ value of a pre-existing business is to be quantified or what indexation should be applied to passive growth of a non-marital asset, or whether the case was properly characterised as a short marriage, dual career case seems to me to be a big ask. Happily, recent decisions of the Court of Appeal in the field appear to support a less technical, more flexible and more common-sense approach to such issues.

In exercising the court’s powers when making financial remedies orders following divorce proceedings, the starting point is s.25 of the Matrimonial Causes Act 1973. Under s.25(1), the court must have regard to all the circumstances of the case, first consideration being given to the welfare while a minor of any child of the family, and in particular must have regard to the matters listed in s.25(2) (a) to (h):

“(a)

the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;

(b)

the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;

(c)

the standard of living enjoyed by the family before the breakdown of the marriage;

(d)

the age of each party to the marriage and the duration of the marriage;

(e)

any physical or mental disability of either of the parties to the marriage;

(f)

the contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;

(g)

the conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it;

(h)

… the value to each of the parties to the marriage of any benefit which, by reason of the dissolution or annulment of the marriage, that party will lose the chance of acquiring.”

The current approach is governed by two decisions of the House of Lords in White vWhite[2001] 1 AC 596 (hereafter “White”) and Miller v Miller; McFarlane vMcFarlane[2006] 1 FLR 1186 (hereafter “Miller”). It is well established that the court’s award, in cases where the parties’ resources exceed their needs, will be the higher of that reached by the application of the sharing principle and that reached by application of the need principle. Lord Nicholls in White v White[2001] AC 596 at page 605:

“there is one principle of universal application which can be stated with confidence. In seeking to achieve a fair outcome, there is no place for discrimination between husband and wife and their respective roles. …. [W]hatever the division of labour chosen by the husband and wife, or forced upon them by circumstances, fairness requires that this should not prejudice or advantage either party when considering paragraph (f), relating to the parties’ contributions. This is implicit in the very language of paragraph (f): ‘the contributions which each … has made or is likely … to make to the welfare of the family, including any contribution by looking after the home or caring for the family’. If, in their different spheres, each contributed equally to the family, then in principle it matters not which of them earned the money and built up the assets. There should be no bias in favour of the money-earner and against the homemaker and the child-carer.”

For that reason, Lord Nicholls recommended that, when a judge reached the preliminary view that one party should receive a bigger share of the assets than the other, “before reaching a firm conclusion and making an order along these lines, a judge will always be well advised to check his tentative views against the yardstick of equality of division.”

In Miller, Lord Nicholls developed the analysis of fairness as follows (at paragraphs 9 to 16):

“9.

The starting point is surely not controversial. In the search for a fair outcome it is pertinent to have in mind that fairness generates obligations as well as rights. The financial provision made on divorce by one party for the other, still typically the wife, is not in the nature of largesse. It is not a case of ‘taking away’ from one party and ‘giving’ to the other property which ‘belongs’ to the former.

The claimant is not a supplicant. Each party to a marriage is entitled to a fair share of the available property. The search is always for what are the requirements of fairness in the particular case.

10.

What, then, in principle, are these requirements? The statute provides that first consideration shall be given to the welfare of the children of the marriage …. Beyond this several elements, or strands are readily discernible. The first is financial needs ….

11.

This element of fairness reflects the fact that to a greater or lesser extent every relationship of marriage gives rise to a relationship of interdependence. The parties share the roles of money-earner, home-maker and child-carer. Mutual dependence begets mutual obligations of support ….

12.

In most cases the search for fairness largely begins and ends at this stage. In most cases the available assets are insufficient to provide adequately for the needs of two homes. The court seeks to stretch modest finite resources so far as possible to meet the parties’ needs ….

13.

Another strand, recognised more explicitly now than formerly, is compensation. This is aimed at redressing any significant prospective economic disparity between the parties arising from the way they conducted their marriage….

16.

A third strand is sharing. This ‘equal sharing’ principle derives from the basic concept of equality permeating a marriage as understood today. Marriage, it is often said, is a partnership of equals. …. The parties commit themselves to sharing their lives. They live and work together. When their partnership ends, each is entitled to an equal share of the assets of the partnership, unless there is a good reason to the contrary. Fairness requires no less. But I emphasise the qualifying phrase: ‘unless there is good reason to the contrary’. The yardstick of equality is to be applied as an aid, not a rule.”

In the Hart case Lord Justice Moylan noted that in Charman the Court of Appeal identified the origins of the sharing principle as being in the parties’ contributions and that a proper evaluation of the parties’ different contributions should generally lead to an equal division of their property unless there was good reason for the division to be unequal.

Thus, in cases where the parties have substantial wealth so that considerations of need are irrelevant, the court starts from the position that the matrimonial assets will be subjected to the “sharing principle” and divided equally between the parties.

As the Court of Appeal recently observed in Work v Gray[2017] EWCA Civ 270 at paragraph 34, “the sharing principle is now firmly embedded and, in those cases where the resources exceed needs, the ‘ordinary consequence’ of its application will be the equal division of matrimonial property.” The principle is, however, subject to a number of exceptions, qualifications or caveats, of which one in particular is relevant here.

In applying the sharing principle, a distinction is drawn between assets or property that can be classified as matrimonial as opposed to non-matrimonial. The husband argues that a reason for departing from the sharing principle is that his shares in the company should be regarded as a species of non-matrimonial property and that they fall outside the principle altogether. In order to consider the next issue, it is necessary to go back to the case law. Much of the summary that follows is drawn from the judgment of Mr Justice Baker (as he then was) in XW-v-XH [2017] EWFC 76 and I am indebted to him for his compendious consideration of the case law in that case.

The origin of the distinction between matrimonial and non-matrimonial assets is found in the speech of Lord Nicholls of Birkenhead in White at page 610(e) to (f):

“… property owned by one spouse before the marriage, and inherited property whenever acquired, stand on a different footing from what may be loosely called matrimonial property. According to this view, on a breakdown of the marriage these two classes of property should not necessarily be treated in the same way. Property acquired before marriage and inherited property acquired during marriage come from a source wholly external to the marriage. In fairness, where this property still exists, the spouse to whom it was given should be allowed to keep it. Conversely, the other spouse has a weaker claim to such property than he or she may have regarding matrimonial property.”

In Miller, the House of Lords returned to the question of the distinction between matrimonial and non-matrimonial property. On this occasion, however, Lord Nicholls qualified the distinction between matrimonial and non-matrimonial property. At paragraph 26, under the heading “Flexibility”, he observed:

“This difference in treatment of matrimonial property and non-matrimonial property might suggest that in every case a clear and precise boundary should be drawn between these two categories of property. This is not so. Fairness has a broad horizon. Sometimes, in the case of a business, it can be artificial to attempt to draw a sharp dividing line as at the parties’ wedding day. Similarly the ‘equal sharing’ principle might suggest that each of the party’s assets should be separately and exactly valued. But valuations are often a matter of opinion on which experts differ.”

A little earlier in his speech, Lord Nicholls had said:

“…the courts should be exceedingly slow to introduce, or reintroduce, a distinction between ‘family’ assets and ‘business or investment’ assets. In all cases the nature and source of the parties’ property are a matter to be taken into account when determining the requirements of fairness …. But ‘business and investment’ assets can be the financial fruits of a marriage partnership as much as ‘family’ assets. The equal sharing principle applies to the former as well as the latter. The rationale underlying the sharing principle is as much applicable to ‘business and investment’ assets as to ‘family’ assets.”

Baroness Hale of Richmond, however, took a slightly different view. At paragraph 149 she said:

“the question, therefore, is whether in the very big-money cases, it is fair to take some account of the source and nature of the assets, in the same way that some account is taken of the source of those assets in inherited or family wealth. Is the “matrimonial property” to consist of everything acquired during the marriage (which should probably include periods of premarital cohabitation and engagement) or might a distinction be drawn between family and other assets? .... To this list should clearly be added family businesses or joint ventures in which they both work. It is easy to see such assets as the fruits of the marital partnership. It is also easy to see each party’s efforts as making a real contribution to the acquisition of such assets. [My emphasis added]

At paragraph 150 though she posed a question:

“More difficult are business or investment assets which have been generated solely or mainly by the efforts of one party. The other party has often made some contribution to the business, at least in its early days, and has continued with her agreed contribution to the welfare of the family …. But in these non-businesspartnerships, non-family assets cases, the bulk of the property has been generated by one party. Does this provide a reason for departing from the yardstick of equality?”

She proceeded to identify the competing arguments (at paragraphs 150-1): “On the one hand is the view… that commercial and domestic contributions are intrinsically incommensurable. It is easy to count the money or property which one has acquired. It is impossible to count the value which the other has added to their lives together. One is counted in money or money’s worth. The other is counted in domestic comfort and happiness. If the law is to avoid discrimination between the gender roles, it should regard all the assets generated in either way during the marriage as family assets to be divided equally between them unless some other good reason is shown to do otherwise …. On the other hand is the view that this is unrealistic …. Some [assets] are not family assets in the way that the home, its contents and the family savings are family assets …. It simply cannot be demonstrated that the domestic contribution, important though it has been to the welfare and happiness of the family as a whole, has contributed to the acquisition. If the money-maker had not had a wife to look after him, no doubt he would have found others to do it for him. Further, great wealth can be generated in a very short time, as the Miller case shows; but domestic contributions by the very nature take time to mature into contributions to the welfare of the family.”

Baroness Hale continued:

“152.

My Lords, while I do not think that these arguments can be ignored, I think they are irrelevant in the great majority of cases. In the very small number of cases where they might make a difference, of which Miller may be one, the answer is the same as given in White in connection with premarital property, inheritance and gifts. The source of the assets may be taken into account but its importance will diminish over time. Put the other way round, the court is expressly required to take into account the duration of the marriage: section 25(2)(d). If the assets are not ‘family assets’, or not generated by the joint efforts of the parties, then the duration of the marriage may well justify a departure from the yardstick of equality of division. As we are talking here of a departure from that yardstick, I would prefer to put this in terms of a reduction to reflect the period of time over which the domestic contribution has or will continue ….

153.

This is simply to recognise that in a matrimonial property regime which still starts with the premise of separate property, there is still some scope for one party to acquire and retain separate property which is not automatically to be shared equally between them. The nature and the source of the property and the way the couple have run their lives may be taken into account in deciding how it should be shared. There may be other examples. Take, for example, a genuine dual career family where each party has worked throughout the marriage and certain assets have been pooled for the benefit of the family but others have not. There may be no relationship-generated needs or other disadvantages for which compensation is warranted. We can assume that the family assets, in the sense discussed earlier, should be divided equally. But it might well be fair to leave undisturbed whatever additional surplus each has accumulated during his or her working life. However, one should be careful not take this approach too far. What seems fair and sensible at the outset of a relationship may seem much less fair and sensible when it ends. And there could well be a sense of injustice if a dual career spouse who has worked outside as well as inside the home throughout the marriage ended up less well off the one who had only or mainly worked inside the home.”

Thus, on the facts of Miller, Baroness Hale (paragraph 158) reached the conclusion that:

“…there was a reason to depart from the yardstick of equality because those were business assets generated solely by the husband during a short marriage. Whether one puts this as a result of the contacts and capacities he brought to the marriage or as the result of the nature and source of the assets generated … it comes to much the same thing.”

In Charman v Charman (No.4)[2007] EWCA Civ 503,[2007] 1 FLR 1246, the Court of Appeal was presented with an argument that “non-business partnership, nonfamily assets”, or “unilateral assets” should be excluded altogether from the sharing principle in a case involving a marriage of 28 years’ duration. At paragraph 83, Sir Mark Potter, giving the judgment of the court, said:

“We hasten to correct a serious misapprehension at the heart of the submission …. Baroness Hale of Richmond put forward the distinction between unilateral assets and other matrimonial property for use in cases in which the marriage was short. And, although obiter she suggested an extension of it to another situation, namely that of the dual career … she definitely did not commend the distinction for use in other cases. Its application in a case such as the present would be deeply discriminatory and would gravely undermine the sharing principle articulated, albeit embryonically, in White and emphatically developed in other parts of the speeches in Miller itself.”

At paragraph 86, the President added:

“The extension of the concept of unilateral assets, suggested by Baroness Hale of Richmond in Miller at para 153, was expressly endorsed by Lord Mance at para 170. Although obiter, it clearly commands great respect. It relates to the ‘dual career’. The suggestion was that, where both parties had worked throughout the marriage, had pooled some of the assets built up by their efforts but had chosen to keep other such assets under their separate control, the latter, although unequal in amount, were unilateral assets which might not be subject to the sharing principle. Because of the convincing logical objections of Lord Nicholls of Birkenhead to the different treatment of unilateral assets, we would prefer, so far as it is proper for us to do so, to keep the room for application of the concept closely confined.”

I was referred to the decision of the Court of Appeal in K-v-L [[2011] EWCA Civ550, [2012] 1 WLR 306 where Lord Justice Wilson (as he then was) considered at paragraphs 19 to 21 an argument that a departure from equality further than to 66.6% - 33.3% was not appropriate to reflect an allowance for special contribution. Lord Justice Wilson made clear that the reference in Charman to the unlikelihood of departure from equality further than 66.6%-33.3% was in respect of division of matrimonial property and he drew a distinction between sharing of matrimonial property and sharing of non-matrimonial property where the application of sharing principles might lead to very extensive departure from equal division, often to 100%0%.

The law concerning the treatment of unilateral assets was considered further in the judgment of the Court of Appeal in Sharp. The Court of Appeal’s decision was based on the opinion of the majority of the House of Lords in Miller, namely Baroness Hale of Richmond, Lord Hoffmann and Lord Mance. The two leading speeches in the House in Miller were given by Baroness Hale and Lord Nicholls of Birkenhead. As McFarlane LJ observed in Sharp (at paragraph 84), there was much common ground in those two speeches, but on some points they differed and on those points it is the opinion of Baroness Hale, with whom Lord Hoffmann and Lord Mance agreed, which represents the authoritative view. As demonstrated by the extracts from the citations above, one point on which the two principal speeches in Miller differed was whether or not the court should make a distinction between “family assets” and “business or investment assets”. Lord Nicholls was of the view that the court should be “exceedingly slow to do so” (paragraph 20). In contrast, Baroness Hale and the majority adopted a more flexible approach taking account of “the nature and the source of the property and the way the couple have run their lives” (paragraph 153).

In Sharp, McFarlane LJ (at paragraph 80) expressed concern about the passage in the Charman judgment cited above:

“Where… the lone opinion of Lord Nicholls [in Miller] on a matter is in conflict with that of the three members of the House who were in agreement on that matter, the opinion of the majority must be the authoritative view. In so far as the judgment of this court in Charman at paragraph 86 has been interpreted as expressing a preference for the opinion of Lord Nicholls on such matters, such an interpretation is, in my view, erroneous.”

After a very careful analysis of all the speeches in Miller, McFarlane LJ in Sharp reached the following conclusion:

“97.

The inescapable conclusion from this analysis of the speeches in Miller, in terms of the possibility of some alteration from, rather than a strict application of, the equal sharing principle in relation to short, childless marriages, where both spouses have largely been in full-time employment and where only some of their finances have been pooled, is that fairness may require a reduction from a full 50% share or the exclusion of some property from the 50% calculation. Of the five members of the Judicial Committee, only Lord Nicholls suggested a contrary view and even on his analysis the potential for some form of relaxation can be seen.

98.

In contrast to the position in Charman, this court now has to confront the short marriage ‘dual career’ issue directly on the facts of the present case. In my view, whilst affording due respect to the observations made by the experienced court in Charman, we are obliged to go back to the speeches in Miller and do so on the basis that I have described …. For the reasons that I have given, the authoritative guidance in relation to short marriage, dual-career cases is to be found in the speeches of the majority and not, where it differs, in that of Lord Nicholls.

99.

Whilst much of what is said in this regard in Miller (for example relating to dual careers) is probably obiter, the conclusive point to be taken from Miller, however, arises from the actual determination of the House of Lords on the Miller appeal itself, where all five of their Lordships agreed that Mrs Miller should receive substantially less than 50% of the value of the New Star shares. The existence of a basis for departing from a strict application of equal sharing, albeit in a small number of cases and on the unusual facts of that case, is thereby established as a matter of law.”

Sharp, like Miller, involved a short, childless marriage. Unlike Miller, where the wife did not work during the marriage, both Mr and Mrs Sharp worked for most of the duration of their marriage. This led McFarlane LJ to consider what had been said about “dual career” cases in Miller and Charman:

“106.

Miller is a short marriage, but not a dual career case. This distinction is directly acknowledged by Baroness Hale at paragraph 152: “the duration of the marriage may justify a departure from the yardstick of equality of division”. This was also the ratio of Baroness Hale’s decision on the facts of Miller …. By contrast, at paragraph 153, Baroness Hale goes on to consider a different case, which did not arise on the facts of either Miller or McFarlane, namely a dual career marriage of any length (and not expressly confined to a short marriage). While the first sentence, and, probably, the second sentence of paragraph 153 are part of the ratio of Miller, the rest of that paragraph appears to be obiter.

107.

The distinction between the treatment of short marriages in paragraph 152 and the (obiter) discussion about dual career marriages in paragraph 153 in Miller was recognised by this court in Charman at paragraph 83 and that distinction is carried forward in paragraphs 85 and 86. At paragraph 85 the court addresses the issue of short marriages and accepts the majority view expressed by Baroness Hale at paragraph 152 of Miller, while at paragraph 86 they address the obiter example of dual career marriages. It was clearly unnecessary for them to do so, because Charman was not a dual career marriage. What is said at paragraph 86 is therefore obiter comment on Baroness Hale’s obiter comment on dual career marriages. The court appears to have been concerned that recognition of unilateral assets as falling outside the sharing principle in a long (or more than short) marriage could well produce an unfair result. For that reason, they wanted the notion of different treatment of unilateral assets in such marriages to be ‘closely confined’. Baroness Hale had herself recognised the need for care and limitation in the last three sentences of paragraph 153. That issue, which does not arise on the facts of the present case, remains a matter for debate on another day. On that analysis of the key passages in the judgment in Charman, there is no impediment, in terms of possible conflict, for this court now to contemplate a departure from the equal sharing principle in the case of a dual career marriage which was short, and where the couple had kept their finances separate.”

Thus the Court of Appeal in Sharp left open the question as to whether the approach of the majority to unilateral assets in Miller applied outside the “discrete cohort of cases” involving short, childless marriages, where both spouses have largely been in full-time employment. McFarlane LJ concluded that the question whether the majority’s approach to unilateral assets applied more widely, which did not arise on the facts of Sharp, “remains a matter for debate on another day”.

Lord Justice Moylan also addressed the issue of non-matrimonial and matrimonial property in the decision in Hart.

“[61] I now turn to the court's approach to non-matrimonial and matrimonial property when applying the sharing principle. I address the reasons underpinning their different treatment in the discretionary exercise and the question of whether the court's approach should be formulaic or can be broader. I also address the manner in which, in my view, the court should deal with this issue in practical terms as a matter of case management and determination.

“[62] The classification of property as non-matrimonial or matrimonial is relevant in the application of the sharing principle because the court is seeking to establish the extent to which the current assets owned by the parties comprise or reflect the product of marital endeavour and the extent to which they do not. This arises because, as explained below, the sharing principle applies with force to matrimonial property but does not apply, or applies with significantly less force, to non-matrimonial property.

Lord Justice Moylan noted the issue of whether there had been any case since Charman in which a spouse had been awarded a share of non-matrimonial property by application of the sharing principle, but declined to address it further. However he did deal with the evidential issue of how the court was to determine what was a product of marital endeavour.

“[67] The exercise on which the court is engaged, when applying the sharing principle in this context, is, therefore, to determine whether the current assets owned by the parties, or within the scope of section 25(2)(a), comprise the product of marital endeavour. The court must then decide how that determination should impact on the court's award. This raises (a) an evidential issue, namely a factual determination which has been described in terms of identifying whether property is matrimonial or is non-matrimonial but which, in my view, is often more nuanced than this because property can be a combination of the two; and (b) an evaluative or discretionary issue, namely the manner in which the factual determination is weighed when the court is undertaking the section 25 exercise and deciding what award to make.

[68]

Put in simple terms, the court ultimately has to decide, as part of the discretionary exercise, how to weigh or reflect the existence of non-matrimonial property when determining the award. A key question which has emerged, and which is engaged in the current case, is whether this should be undertaken in a formulaic manner or whether the court can adopt a broader approach. Before answering this question, I propose to refer to, what I consider to be, relevant observations or guidance from some of the authorities starting with Miller.

[69]

In Miller Lord Nicholls addressed the approach which the court should take under the heading "Flexibility":

"[26] This difference in treatment of matrimonial and non-matrimonial property might suggest that in every case a clear and precise boundary should be drawn between these two categories of property. This is not so. Fairness has a broad horizon. Sometimes, in the case of a business, it can be artificial to attempt to draw a sharp dividing line as at the parties' wedding day. Similarly the 'equal sharing' principle might suggest that each of the party's assets should be separately and exactly valued. But valuations are often a matter of opinion on which experts differ. A thorough investigation into these differences can be extremely expensive and of doubtful utility. The costs involved can quickly become disproportionate. The case of Mr and Mrs Miller illustrates this only too well.

[27] Accordingly, where it becomes necessary to distinguish matrimonial property from non-matrimonial property the court may do so with the degree of particularity or generality appropriate in the case. The judge will then give to the contribution made by one party's non-matrimonial property the weight he considers just. He will do so with such generality or particularity as he considers appropriate in the circumstances of the case."

[70]

Lady Hale noted, as referred to above, that "the importance of the source of the assets will diminish over time". She also commented that:

"As the family's personal and financial inter-dependence grows, it becomes harder and harder to disentangle what came from where" (paragraph 148).

[71]

In C v C, I expressed the view that Miller did not require a financial account to be undertaken for the purposes of seeking to establish what element of the parties' wealth should be characterised as matrimonial property. I also expressed concern about the potential for expensive investigation if the court was required to search for clear and precise boundaries:

A bit later I concluded that:

"[48] … a flexible approach is required to ensure that the court's focus remains on achieving a result which is fair. Of course, as the Court of Appeal said in Charman, judges must be loyal to the guidance given on a topic by the House of Lords. However, it is the application of guidance, not the rigid application of any specific formula coupled with a requirement to find clear and precise boundaries. The approach I propose to adopt is to set out the relevant factors drawn from s 25 and then to consider the principles of need and sharing, neither party having submitted that this is a case in which the principle of compensation has any application."

[76] Further, however, it is important to note that Jones used both a mathematical and a broad approach to determine the fairness of the proposed award. It is also important to note that both approaches arrived, effectively, at the same outcome. In my view, this demonstrates, through the use of both approaches and by reference to the respective outcomes, that both methods provide a permissible route to arriving at a fair determination. Indeed, the importance of the broad assessment is highlighted in the judgments of the other members of the court. Arden LJ referred to "the crosscheck of overall fairness (in paragraph 52) … (as) an essential of the reasoning for my concurrence in the result in this case" (paragraph 64). Sir Nicholas Wall P also applied his view of "overall fairness to both parties" to arrive at a bracket for the award of between 30% and 36%.

Lord Justice Moylan returned to the issues in his conclusion and set out what in effect amounts to a route map to judges confronted with the complicated issues which arise in particular where there is an argument as to whether an asset which one party brought into the marriage remains a non-marital asset or has become a marital asset or constitutes a composite of the two. I propose to quote from the conclusions at length given their importance.

The subject of the appeal was whether a determination by His Honour Judge Wildblood QC of an award which was determined by an assessment of the wife’s needs was wrong. The appeal was dismissed notwithstanding that it was reached by an assessment of needs rather than by application of the sharing principle. However, Lord Justice Moylan concluded that the award could not be successfully challenged because the judge independently carried out an overview of the case to ensure that his proposed award was fair. Although assessed by reference to needs, the judge had considered alternative approaches including him assessing what weight to give to the husband’s premarital wealth when assessing the extent to which the parties’ current wealth reflected marital endeavour and the extent to which it did not. The judge expressly concluded that his proposed award gave proper weight to that factor and that his other approaches did not give proper weight to that factor and accordingly would not be fair. Lord Justice Moylan noted that this was a conclusion which the judge was entitled to reach, and was part of an evaluative or discretionary decision.

The balance of the authorities support an approach which permits the court in appropriate circumstances to identify an asset as a non-marital asset, or part of an asset being identified as a non-marital asset. It seems to me that ultimately it is fact specific although the shorter the marriage in practice, the easier it may be to identify a non-marital asset and the longer the period of the marriage and the greater the extent to which the asset has a mingled character, the harder it may be to identify it.

Quite separately from the question of whether Zebra should be regarded in its entirety as a non-marital asset, the husband submits as an alternative that the latent value of Zebra at the commencement of the marriage (or marriage plus countable premarital cohabitation) represents a contribution solely attributable to the husband and unmatched by the wife. He asserts that because the heavy lifting had been done in the development of Zebra as a business prior to 2007 that the business had a very substantial value at that time. The husband submits that the value that Zebra had at that point should be identified including its springboard potential and that the resulting figure should be subject to some form of indexation to reflect how it grew in value of its own momentum and without regard to the additional contribution of the husband over the marriage; the latter of course being a contribution to the marital assets matched by the wife’s contributions in the course of the marriage.

An analysis of the case law on this issue starts with the decision of the Court of Appeal (Sir Nicholas Wall P, Arden and Wilson LJJ) in Jones v Jones[2011] EWCACiv 41. In that case, the parties were married for just under ten years. At the date of the marriage, the husband was the sole owner of a company which he had started

On the facts of that case, Wilson LJ took as the first step the net proceeds of sale of £25m. He continued:

“37.

Our second step should be to ascribe to the company a value, as at the date of the marriage, which is both realistic and apt to the context in which it is required. In that regard our starting-point should be the valuation of the company as at the date upon which the respective accountants were ultimately agreed, namely £2m net….

38.

In my view, however, there are two reasons why the sum of £2m requires substantial adjustment.

39.

The first reason for adjustment arises out of further consideration of the concept of latent potential or, in the judge’s word, the springboard. I am concerned lest our decision in this case were to be misunderstood as generally encouraging an enquiry into whether the professional valuation of the company at a specified date should be subject to increase by reference to the presence within it at that date of springboard. Mr Pointer correctly submits that a professional valuation calculated by reference to future maintainable earnings will generally reflect the value of any such springboard. But there will be rare cases in which a judge may be persuaded that it has failed to do so ….”

Having noted (at paragraph 42) that:

“we are concerned only with the value to be attributed to the springboard in place at that date [i.e. the date of the marriage], not with a value to be attributed to the subsequent activity of the diver or gymnast upon it”

Wilson LJ concluded, on this issue (paragraph 43):

“By reference to its latent potential at the date of the marriage, I propose to take the value of the company at that date as being £4m rather than £2m. The figure is again, highly arbitrary; I make no apology for this but it reinforces the need to test against some other approach the conclusion ultimately reached by reference to it …. [N]ot even a judge at first instance, with access to all the evidence referable to the reason for the company’s later success, could secure acquittal of a charge of having been arbitrary at this stage of conversion of such a feature into terms of money.”

Wilson LJ added, however, that there was a further reason for adjustment, namely

“the need to allow for passive economic growth in the company between the date of the marriage and the date of sale”. He explained this at paragraph 46:

“…Take a work of art or land with potential for development which a spouse has owned since prior to the marriage and which, without activity on his or her part, has substantially increased in value during it. The court would accept that the increase in its value during the marriage was as much non-matrimonial as its value at the date of the marriage: it would thereby allow for its passive growth. Passive growth is to be contrasted with growth as a result of contributions of one sort or another made during the marriage, i.e. of activity, irrespective of whether such is achieved with the assistance of a springboard already in position.”

Applying this to the facts of the case before him, he continued (paragraph 49):

“…If at the date of the marriage the husband’s £4m had represented the value of a minority holding in the company in which he was no more than an investor but which operated in a field identical to that in which his company actually operated, he would again be the beneficiary of adjustment for any passive economic growth. I do not see how the law can logically decline to attempt to enquire into the existence and, if so, the amount of such growth by reference only to the nature of the husband’s investment.”

On the facts of that case, Wilson LJ applied to the sum of £4m an increase representing the percentage increase in the relevant stock exchange index between the date of the marriage and the date of the sale, thereby lifting the figure from £4m to £8.7m, which in turn led to an award to the wife of £8m.

Wilson LJ then tested the suggested award by the application of what he characterised as Mr Pointer’s approach, namely identifying such lesser percentage than 50% of the total assets as seemed fair to make overall allowance for the husband’s introduction of his company into the marriage. Recording that his view of overall fairness to the parties led him to identify a bracket of between 30% and 36%, he concluded that the suggested award survived the test.

Sir Nicholas Wall P agreed that the appeal should be allowed for the reasons given by Wilson LJ, whilst noting that “Wilson LJ’s expertise in this area of the law is infinitely greater than my own, and I thus make no comment on the means whereby he has reached his conclusions.” Arden LJ, whilst agreeing with Wilson LJ’s conclusion, disagreed with his treatment of the issue of passive growth, saying:

“59.

As to ‘passive growth’, I agree that in principle and, in the circumstances of this case, an allowance should be made even though the asset is a private company the business of which is developed and expanded (in this case exponentially) during the marriage …

60.

However, I would query whether what Wilson LJ proposes in his judgment is really passive growth and reject the notion that the only growth that can be taken into account is passive growth. First, as a matter of principle, when valuing the non-matrimonial assets at the end of a marriage, the court should so far as it can look at what has actually happened and not at what might have happened. In parenthesis, I would add that, because of this principle of ‘reality’, I would reject the graphs provided by Miss Stone seeking to establish the values of the company at certain dates based on an artificial assumption of a straightline growth up to eventual sale. Secondly, if only passive growth is taken into account, the law rewards the spouse who buries her non-matrimonial assets in the ground rather than the spouse who actively manages them. The correct analysis in my judgment, in circumstances of the present, is that, where a spouse has a non-matrimonial asset of the present kind, he is entitled to that element of the company at the end of the day which can fairly be taken to represent the fruits of the non-matrimonial assets that accrue during the marriage, even if the fruits are the product of activity by him or on his own behalf.”

The decision of the Court of Appeal in Hart (as set out above) identifies that whether the court deploys a formulaic (for instance Mostyn J’s straight line) or a broader approach will depend on the circumstances confronting the court and its ability to deploy a formulaic approach having regard to the evidence before it. In XW-v-XH (above) Baker J said:

“I was informed by counsel that courts have regularly made allowance for passive growth in the way advocated by Wilson LJ. In addition, however, there has been further consideration as to whether an allowance should be made for latent potential in at least two cases at first instance – Robertson v Robertson[2016] EWHC 613(Fam)(per Holman J) and WM v HM, supra, (per Mostyn J).”

In the Robertson case, Mr Justice Holman considered that the methodology adopted in Jones led to an unfair (to the husband) undervaluation of the latent value of the assets he brought into the marriage. Holman J therefore attributed 50% of the value to the husband as a non-marital asset and 50% of the value to the husband and wife to be shared equally. In WM v HM, Mostyn J returned to the argument considered but rejected by Arden LJ in Jones v Jones - a linear or arithmetical apportionment based on the respective periods of time before and after the marriage. Noting that neither of the other judges in Jones had mentioned this argument, he adopted the linear approach on the basis that it resonated with fairness “and that, intrinsically, value is (at least) as much a function of time as it is of work or market forces. In argument, I asked ‘how

The weight of authority would support an approach which seeks to identify and to take into account any latent potential that a business asset had when it was brought into the marriage by a party. The authorities would also support an allowance for the passive growth of that latent potential during the course of the marriage. How that is to be done will depend on the facts of the individual case.

The speeches of the House of Lords in White and Miller make clear that contributions come in all shapes and sizes. In some marriages, contributions may be very clearly delineated between the money earner and the homemaker but they are treated equally. In many, the dividing lines will be far more blurred with each party contributing to the various needs of the family in a wide variety of different ways. Ultimately a marriage is about a partnership in which usually both will contribute in the way in which they are able. Thus contributions almost inevitably have to be evaluated in the context of the marriage that existed. Where that marriage is atypical it seems to me that the court must approach it in that way. To do otherwise would be to risk discrimination. It is a regrettable feature of the husband’s presentation of this case that, at least in opening and in the documents filed by him prior to the hearing, he asserted that the wife had made no contributions to the marriage or no contributions of any value. The motivation for making such an assertion probably finds its roots in the husband’s post separation re-evaluation of the wife’s attributes and his unfair conclusion that she is and always was a gold-digger. As became clear in the course of the evidence and indeed in the husband’s evidence he accepted that she had contributed in various ways to the marriage, whether in assisting in the design and furnishing their various homes, in looking after WD and his own children, in dealing with domestic living arrangements including liaising with staff, organising travel and holidays, arranging their social life and a myriad of other tasks in the domestic context. By the closing of the case Mr Marks QC did not press to any real extent any argument that the wife had not contributed in ways of value to the welfare of the family.

Given that Mr Cusworth QC on behalf of the wife accepts that in principle the court may properly take into account the value of Zebra at the commencement of the marriage and that the capital the husband brought into the marriage, which was expended on meeting the parties living expenses during the marriage and depart from equality to reflect that, I do not intend to dwell at length any further on the issue of contribution. One of the few issues not in play in this case is an argument over “special contribution”. In K v L (at §15):

The standard of living that the parties enjoyed during the marriage is part of the section 25 exercise. However, that does not mean that after the termination of the marriage that standard of living can be expected to be provided for so that it endures for the rest of the parties’ lives.

As Roberts J said in AB v FC [2016] EWHC 3285 (Fam) in the context of a 19-month marriage where there was a child:

Central to the wife’s case is the submission that this was not a short marriage of four years but rather that including premarital cohabitation from 2007 to 2013 it constitutes a medium if not long marriage of around 10 years. Conversely, the husband argues that this was a short marriage of only four years and that the relationship prior to 2013 was so far removed from cohabitation, and the transition from that relationship to marriage so far from seamless, that it cannot be added to the four-year marriage either to extend the duration of the marriage (within section 25 (2) (d)) or as part of all of the circumstances of the case (within section 25 (1)).

The current approach continues to be characterised by the approach of Mostyn J (as he now is) in GW v RW [2003] 2 FLR 108. In that case, he considered:

Mr Cusworth QC invited me to consider the decision in the case of Kimber-v-Kimber[2000] 1 FLR 383 where His Honour Judge Tyrer identified eight markers to assist in determining cohabitation (albeit in a somewhat different context)

Mr Cusworth QC also drew my attention to a number of first instance decisions in the Family Division that considered premarital cohabitation:

It emerges from the authorities that the issue of premarital cohabitation may be treated either as extending the period of the marriage so as to create a marriage of longer duration or it may be treated as a circumstance of the case which is to be taken into account more generally. It also emerges from the cases that cohabitation prior to marriage is relevant because it may indicate that, prior to the formal commencement of marriage, the parties had entered into the sort of partnership involving the mutual support, working together, rights and obligations which may be indistinguishable from those which arise when parties begin to live together only after marriage. It seems therefore that what the court should be looking for is a relationship of the sort which carries with it sufficient markers which justify being treated as a marriage. Mr Cusworth QC submitted that if there was no change in the nature of the relationship as between before and after the marriage that this of itself was an indication (possibly determinative) that the premarital relationship should be equated with marriage. As a matter of logic, I do not think this necessarily works. Take, for instance, a marriage which is entered into as a matter of convenience, or which otherwise is not followed with the usual panoply of mutual commitments which signify marriage. That would not entitle a premarital period which was similarly empty of such commitments to be counted. What the court must be looking to identify is a time at which the relationship had acquired sufficient mutuality of commitment to equate to marriage. Of course in very many cases, possibly most cases, this will be very obviously marked by the parties cohabiting, possibly in conjunction with the purchase of a property. However in other cases, and this may be one of them, it is not so easy to identify. The mere fact that parties begin to spend time in each other’s homes does not of itself, it seems to me, equate to marriage. In situations such as this, the court must look to an accumulation of markers of marriage which eventually will take the relationship over the threshold into a quasi-marital relationship which may then either be added to the marriage to establish a longer marriage or which becomes a weightier factor as one of the circumstances of the case.

Mr Cusworth QC submits that the husband’s failure to provide detailed documentation in relation to the sums he put into Zebra (at least until the morning of day three of the hearing) and his failure to provide documentation which might evidence the value of Zebra (save for the 2007 balance sheet provided by him in May 2018 and a 2009 balance sheet which emerged on day three of the hearing) demonstrate that the husband was withholding information from the court. Mr Cusworth QC reminds me that at the case management conference I specifically declined to order a forensic accountancy report in respect of Zebra and observed that both in relation to that and in relation to a section of a new questionnaire raised by the wife, I was relying upon the husband to produce relevant documents which would illustrate the matters that he relied upon. The wife invites me to infer that the only explanation for the husband’s failure to disclose relevant documents is that he has something to hide. In this context it is not hidden assets that are the issue but rather that the wife contends that the value of Zebra as at 2007 must have been low. If it was of significant value, why, rhetorically, would the husband not have produced the documents to show that? As a consequence, Mr Cusworth QC invites me to draw inferences against the husband. In the context of the issues in this case, that inference would involve placing any valuation of Zebra at the lower end of the bracket, and placing the wife’s share or the value of her share in any matrimonial property at the upper end of any possible bracket.

In Prest-v-Prest [2013] UKSC 34 Lord Sumption said, in a case concerning the assessment of a husband’s present available wealth (rather than his historic position):

The history of these proceedings is set out in the Procedural Chronology. It is drawn primarily from the agreed chronology submitted by the parties. When the matter came before me on 29 June 2018 I gave directions to prepare the application for trial. I declined to order a single joint expert in the form of a forensic accountant to value Zebra in 2007 or at any later date.

The costs incurred by the wife to the conclusion of this hearing are £689,702.84. Of this a total of £609,572, £300,000 has been paid the husband and £309,000 has come from litigation loans taken out by the wife. She thus still owes some £80,000.

The husband’s costs total £640,005. He has paid £556,964 towards that grand total. He still owes some £83,000.

The grand total of the costs that will in due course have been incurred and paid will amount to around £1.33m. The procedural chronology makes abundantly clear that the application has been vigorously and bitterly fought at every step of the way, with considerable skirmishing in the foothills prior to battle being joined before me. This is undoubtedly a reflection of the hostility that the parties currently feel towards each other which I will comment on later. The collateral damage of the wife’s and the husband’s antipathy towards each other are of course their children. This became abundantly clear when WD, now aged 22, came to give evidence and found it difficult to hold back the tears. Even her relationship with her stepsister, HD, which was formerly close, and with HS, her stepbrother, have suffered to the extent that there is currently no ongoing contact, even digital. I very much hope that these are not fatal wounds to those relationships and that when these proceedings conclude the wife and husband will not force their children to choose sides as they so self-evidently have to date, if not expressly by their words, but by their behaviour.

The parties helpfully reduced the very extensive documentation down to 2 core bundles, of which I was able to read the bulk on day one of the hearing, which was set aside for judicial reading. In addition, I received and have read the following documents:

During the course of the hearing and closing submissions various other documents were produced. I have tried to incorporate the information I have taken from those into the chronology or into other parts of this judgment. They included:

I heard evidence from the wife over the course of 1.25 days, from the husband for about a day, and the wife’s witnesses; her daughter WD and her friend Ms U for about half an hour each. I heard submissions for a day.

One of the issues in the case centred around the nature of the premarital relationship and another focused on the standard of living and the future needs of the parties. Another focused on the reliability of the husband’s evidence in relation to the value of his interest in Zebra prior to the relationship. The credibility of the husband and the wife were important in determining where the truth lies in respect of those issues.

In assessing their credibility, I have had regard to the consistency of their evidence over time, its consistency internally, its consistency with contemporaneous documents or other known facts or other witnesses, how it was given and whether the individuals had a motive to tell something other than the truth. In respect of lies told by the parties I give myself a Lucas direction and remind myself that a party may lie for many reasons including fear or embarrassment and that the fact that a party has lied about one matter does not mean that they have lied about everything.

The wife gave evidence first. Mr Marks QC submitted she was rehearsed, robotic and poised. He invited me to conclude that she was prone to exaggeration, inaccurate and unreliable in her dates, and that she lacked connection with the children with her being focused on material considerations. The approach she took in the witness box certainly suggested that she had been coached on how to present, although not perhaps so much in the content of her evidence although there were recurring phrases in the way she described the relationship and her husband which suggested a degree of rehearsal. The strategy she adopted of addressing not only her answers to me, but also whenever she did not understand a question Mr Marks QC asked was to ask me for clarification, suggested a considerable degree of preparation has gone into how she presented. However, I did not think these issues defined her evidence. What most clearly emerged for me in relation to her character and has a direct relevance to the reliability of her evidence is how she sees and describes life in very black-and-white terms. Either things were fabulous, wonderful, loving or they were not. One aspect I thought of her preparation for giving evidence was to seek to avoid describing anything in negative terms. Descriptions of the pre-marital relationship and indeed the marriage and the husband were almost always in glowing terms. Even after the calling off of the marriage in September 2012 she described how good the husband had been and how supportive he had been of her. After another row she described how they had had dinner in the evening and it was “a beautiful perfect Sunday evening”. I don’t think this is just how she gives evidence – I think this is how she sees and describes life itself. She is passionate and throws herself into life with great positivity and this chimes with the husband’s various descriptions of her as vivacious, charming and lighting up rooms when she comes into them. This may be one aspect of the wife’s personality which attracted the husband, he being very much more measured in his feelings. However, it emerged in the evidence that this positivity is matched by an equally passionate negativity. Those who love with passion hate with a vengeance –

“I will make it my mission to destroy you”. The text messages which emerged of the wife in 2011 telling the husband to get “lawyered up” and that she would be going to the Daily Mail, and her demands for an immediate transfer of £250,000 together with the husband’s own evidence of her demands and the rows all suggest that the wife has a negative side in which she is likely to view or describe matters in correspondingly dramatic or hyperbolic terms. How this sounds in her evidence is that it is impossible to believe that life was actually as she describes it. Thus in any description the wife gives there almost inevitably is a hefty degree of hyperbole or exaggeration and one has to therefore discount to some degree or another much of what she says.

She is also capable of frank lies though. When I asked her in an innocuous context about whether she had been married before, she told me that she had and that should she had been divorced. Under cross-examination it emerged that this was not the truth. She had petitioned for divorce, but her husband had defended it and apparently cross-petitioned for a decree of nullity on the basis that the marriage was bigamous when it was entered into and that she knew as much. It was also asserted that she had claimed substantial financial remedies. However, she settled for a relatively modest sum of some £400,000; she actually received £320,000. Although it was far from central to any of the issues that I need to determine, it clearly shows that the wife is capable not only of exaggeration, but also of lying when she considers either she has something to hide or when it might be adverse to her interest. She also provided an inaccurate description of her marital status to the authorities in The Principality, describing herself as divorced when she was not. This does not mean of course that she is lying about everything, far from it; there was little if anything to gain in this court from lying about the bigamous marriage, although perhaps she was concerned that I might characterise her as a gold-digger for previously pursuing a substantial claim against her former husband. In her description of the standard of living and her lifestyle she was clearly genuine in what she said and again was unabashed when describing the huge sums she spent on various aspects of her life. In this respect her openness was quite apparent. Overall, though, I conclude I have to treat her evidence with some caution in particular in relation to the nature of the premarital relationship. Although she held back from any personal criticism of the husband, the tone of the messages she sent in 2011 and those that she sent after separation were replete with vitriol and anger and I have little doubt that she feels extremely powerful negative emotions about the husband. It emerged in evidence that the husband had embarked upon an affair by June 2017 and the end of the marriage, has clearly caused the wife both anger and upset. She has withdrawn from communication with HD and HS although she said that she wanted to re-establish communications after this was over.

WD was tearful even prior to entering the witness box. I believe it was the first time she had seen the husband for many months. Given that he had plainly fulfilled a father figure role for her over many years and she had become close to him it is hardly a surprise that she was emotional. She has had almost no relationship with him since her mother and the husband separated. Given the intensity of the way the wife feels, and indeed as the husband feels, WD has been caught in the crossfire of the bitter dispute between her mother and her stepfather. She has had to ally herself with her mother for understandable reasons. Given the intensity of how her mother feels and expresses her emotions, it would be impossible for WD at this juncture to have a relationship with her stepfather without incurring the displeasure of her mother. Having said that, the evidence she gave did not come across as being deliberately skewed in her mother’s favour although her statement and her evidence was clearly pro her mother’s position. Given that she was having to recall back to 2007 when she was 11 years old, it is hardly surprising that in respects her evidence was impressionistic rather than detailed. She may well have felt at times that she had been left in London being looked after by nannies whilst her mother and stepfather took off to exotic climes or base themselves in The Alps for a ski season. I do not think this was the reality given the wife’s own evidence, that of Ms U and the documents which were contemporaneous. Given that her own father appears to have been an unreliable figure in her life to the extent that she has made the choice herself not to remain in contact with him, it is hardly a surprise that she should have a rosy view of the extent to which a new family had constituted itself from 2007 onwards. She was a credible witness but did not ultimately add very much to my understanding of the premarital relationship as opposed to the intensity of conflict post-separation.

Ms U was careful in her evidence. She did not venture an answer if she was not sure of it. At times I was unsure whether she was overawed by the setting and unable to access her thoughts or whether she was just thinking very carefully. Again, her statement as a friend of the wife was couched in terms supportive of the wife. It was clear from the statement and emerged more clearly perhaps in her oral evidence that

The husband appeared on the surface to be more measured and balanced in his giving of evidence. He at times was able to accept that things he had said in his statements were inaccurate or misleading. He was careful to try not to tell obvious lies. He is clearly a very intelligent and careful man. He must have thought carefully about his presentation in the witness box and had probably been assisted with this. His tone in the witness box was markedly different to that which was given in his witness statements which consistently denigrated the wife’s contribution and role. It emerged very clearly in his evidence that he now views her as a gold-digger. He said that his children view her likewise. It is clear from the emails that he was sending to his friend, R, in 2007 that this was a fear that he had. I don’t know if his three-year relationship which preceded that with the wife and post-dated that with his ex-wife was undermined by this issue. That view of the wife has clearly dominated his thinking about her, has infected his children and has dictated his approach to this case and how he has framed his offer to her. That gives him a reason to give dishonest or unreliable evidence as much as the wife’s anger and desire to get her fair share does for her. In June of this year I made it clear to the husband that I sought his assistance (or that of his accountant) in understanding his financial position in 2007 in relation to Zebra and yet almost no documentation at all was produced. Some emerged during the course of the hearing, I having made some observations on how the husband had not apparently taken up my invitation to provide assistance to me. The husband is a very astute and intelligent man. He identified an opportunity in one deregulated sector and made a fortune from it. He later identified an opportunity in another deregulated sector and has made another fortune from it. He acted as CEO for Zebra for several years. He remained on the board and was brought back specifically to assist in the finalisation of its sale. The idea that the only document he could produce in relation to the value of his interest in Zebra in 2007 was the balance sheet, which did not even directly value Zebra, is risible. The idea that his accountant had nothing is equally improbable. The husband is too careful I think to deliberately destroy documents which would have been relevant to the court process but I have little doubt that, whether prior to the issue of divorce proceedings in November 2017 (perhaps much earlier) or subsequently, he has been able to adopt with a clear (by his standards) conscience the attitude which says these documents do not exist or are not available. I also conclude that he is not preoccupied with his money in the way that some individuals are. He appeared interested in money for what could be done with it, whether in terms of business opportunities or what could be bought with it. He was not preoccupied with figures in the way that some are. His original evidence had been that he sold shares in a successor company to his first business for £15.75 million. When the documents eventually emerged they showed he received £15.332 million. Thus his attitude to precision on figures was not always to his interest and illustrated a relative lack of both interest and accuracy. Ultimately the husband perhaps is defined by being a risk taker, that is why he has made fortunes, and I can only conclude that he decided that the risk of not producing the document and playing the innocent was one he was prepared to take. Whilst it may not be dishonest, it is far from compliant with the duty of full and frank disclosure that this process and this court requires. However, this fact does not automatically convert into adverse conclusions in respect of values. I believe that part of the reasoning process that has influenced the husband’s decisions in this regard is not to hide evidence from the court scrutiny but rather to hinder the wife personally as much as he can and to cause as much frustration to her as he can given that he now clearly feels that she has had the benefit of millions of pounds of his money under false pretences. It is curious, but perhaps understandable, that he should so devalue his 10 year relationship with the wife by now characterising it as one of a gold-digger. It says much about the husband’s own insecurities that he should now be unable to objectively accept that for the majority of the relationship and marriage he and the wife were in love with each other and wished to make a lifelong commitment to each other and to bring children into the world together. Perhaps that is a downside of having the level of wealth that the husband has had that it causes him to doubt the motives of those who care for him.

Thus, overall neither the husband or the wife were very satisfactory witnesses. They were plainly unreliable in some respects, both in their witness statements and in their oral evidence. The level of hostility they felt towards the other, although carefully masked whilst giving evidence was still apparent and clearly influences how they recall the marriage and how they present their cases. Neither of them truly tried to tell the truth the whole truth and nothing but the truth, but to mould it, suppress it, gild it as they thought would best suit the presentation of their case.

Thus, in approaching all factual matters I have had to piece together what I can from their evidence which might be reliable and build a picture from that, from contemporaneous evidence, from common sense and from making what seem to me to be reasonable deductions or inferences having seen the parties give evidence.

Set out below is a chronology of relevant events. Incorporated into it are aspects of the evidence which I consider relevant and where indicated constitutes my conclusions on the facts.

W born (50) in UK. Parents and other family remain living in

H establishes his first business with ML and JB

H ceases to be tax resident in the UK

WD born (22). W’s daughter with a former partner who played

HD born (20). H’s daughter with his first wife.

H sells his first business to a successor business; H receives

H moves to a tax haven for tax reasons. Having sold shares in his first business that were nominally valued at £100 million, the husband would have been bankrupt had he been obliged to pay tax on them in the country in which he was resident, where tax fell due at the date of the share transaction not the realisation of the proceeds of sale. The value of the shares declined dramatically as a result of the stock market crash. The first shares sold at £4.70 per share but the last shares sold at 9p per share

– 2002 H, ML, and two others found Zebra

The precursor to ZCo is incorporated in the tax haven

HS born (15). H’s son with his first wife.

W ceases modelling career. H still resident in the tax haven.

The subsidiary later owned by Zebra is formed and applies for

Accreditation granted by the regulator to the trading subsidiary.

WD’s father ceases all financial support for WD and H assumes

H puts £431,091 as a loan into Zebra (not returned)

Parties consult a doctor in relation to fertility. Both parties undergo fertility testing. By this time it seems that the relationship was firmly in the quasi marital territory.

H pays £18,975 to Zebra – not returned

W enters tenancy in respect of another property in Prime

H ceases to act as CEO of Zebra

The only real estate owned by the parties is the property in France. Although the total of its purchase price and the amount spent on renovations comes to some €6.85 million, the property is now only valued at €3.62 million. This came as something of a surprise given that for FDR purposes sums north of €6 million I think were mooted. However the SJE was not called and his valuation is not challenged and so in that respect the parties are sitting on a very substantial loss as compared to the sums invested. Having regard to the mortgages which are secured against the property it represents a net deficit of £326,486. Similarly the boat represents a net deficit of £427,615. The boat is valued at €650,000 and an offer has been received of €600,000. The husband said that he was hoping to get €700,000 for it.

The difference between the parties relates to

The budget produced in 2015 [C337-8] by the husband demonstrates a very high level of expenditure. The husband said that some of them were exaggerated by him for the purpose of embarking on a discussion with the wife about reducing their expenditure. On examination of them by Mr Cusworth QC it was clear that if some of them were exaggerated it had little impact on the overall picture. The following are illustrative.

The total amounted to €1,863,968 (£1.34m) annually or €155,330 per month. The wife offered some solutions to assist such as selling some of the cars, selling the boat, making the The Principality staff redundant, and other suggestions.

Mr Marks QC in one of the schedules produced suggested that if one isolated the wife’s expenditure out of this schedule, one achieved a figure of €278,468 or £206,273. This figure was achieved by, amongst other things, attributing only 25% of the holiday costs and 25% of the Amex costs to the wife. I think this was done on the basis that the holidays and the Amex also covered the children. This seems to be a somewhat arbitrary and rather unrealistic approach. The evidence made very clear that the husband and wife took numerous luxury holidays on their own and if any adjustment were to be made it would not reduce it to 25% of the total and in any event if anything the holiday figure seems to underestimate the total costs. More significantly, the wife was clearly at least the equal spender of the husband on the American Express card. She described aspects of her expenditure to me. £2000 for a dress, £500-£750 for a pair of shoes, £750 for hair extensions and £1000 to put them in. Of the €360,000 per annum Amex expenditure I would have thought that at least half of it was attributable to the wife. Those minor adjustments to the budget would result in adding in a further €15-€25,000 per annum for the wife’s holidays and another €90,000 per annum for Amex expenditure. That would bring her share of the total up to about €388,000 or £287,000 (at 2015 exchange rates £1=1.35e). At current exchange rates the figure would be closer to £350,000.

Taking the 2007 balance sheet as a starting point, the value of the husband’s capital at that point was £17.64 million. That included approximately £5.2 million which the husband attributed to the value of his interest in Zebra at June 2007. Mr Marks QC and Ms Singer’s schedule B identifies £11.35 million worth of assets which have been expended during the relationship. The wife agreed that the assets identified in the June 2007 balance sheet existed (well at least the properties) and that they had now been sold. So the parties spent in the region of £11 million between 2007 and 2015. In evidence the husband told me that save for a sum of around a £100,000 he did not receive remuneration as CEO of Zebra. In addition, a further £7 million received in respect of the sale of Zebra shares in 2015 has been spent since 2015. Some of those funds went on what Mr Marks QC describes as big-ticket items. The refurbishment of France absorbed €3 million, the refurbishment of the The Principality property €500,000, the boat cost €900,000, and the husband made further investments in Zebra of €800,000, totalling €5.2 million or roughly £4 million. Allowing for sums which are owed to the husband of €5.71 million the husband’s team calculates that the parties have spent around €15.3 million in 10 years. Depending on the exchange rate used that somewhere between £10 and £14 million. Mr Cusworth QC estimates that the figures are more and in particular questions where the £7 million received from the Zebra shares sold in 2015 has gone. I do not consider it necessary to embark on any more detailed analysis of the figures. It is manifestly plain that the husband has spent all of the capital that was left over from the sale of his first business on meeting the lavish standard of living that the parties have led for the last 10 years odd.

The husband’s schedule of expenditure in his form E amounted to some £368,961. Excluding the children’s expenses this amounted to £237,563. In his evidence he accepted that since the sale of the Zebra shares and the receipt of substantial liquid funds he had not limited his expenditure to the sorts of figures included in that schedule. He did not expand on the sorts of sums he had spent, but I got the impression he was not holding back. The fact that he has given his brother £100,000 and his father a classic car is illustrative of the sort of expenditure that the husband finds it easy to make.

The wife’s budgets for the future in her Form E totalled either £598,194 or £431,194 if one excluded second home expenses. Her maintenance pending suit budget totalled £444,463. The husband’s proposed budget totals £199,744. The husband’s criticism of the wife’s expenditure in the context of his own generous expenditure is harsh. In his time, he has spent huge sums on properties, has owned Lamborghinis, Ferraris, Bentleys, has taken private jets, flown first class, and lavished money on his family for the very best that money can buy. The husband says that the wife can reduce her budget because she receives freebies as a brand ambassador. For how long that will continue must be doubtful. In any event, given the sort of lifestyle the husband has indulged over the last 10 years, annual expenditure in the tens of thousands of pounds for clothes footwear handbags and coats is not unreasonable. In addition, sums spent on food wine and entertaining in the tens of thousands of pounds are not unreasonable. And budgets for holidays and air travel of a hundred thousand per annum is not unreasonable. I have little doubt that the husband will be spending similar sums on himself, his girlfriend and his children.

It will be self-evident from the information contained within the chronology that given that the development and growth of Zebra spanned a period of some 15 to 16

Had I authorised the instruction of a single joint forensic accountancy expert in June, it is possible that I would have had opinion evidence which illuminated the issue of the value of Zebra in 2007. I might have had valuations for subsequent years. However, as I have already noted, and as Lord Justice Lewison observed in Versteegh, the valuing of private companies is a matter of no little difficulty. Such valuations are the most fragile that can be obtained. The reasons were explored further in that case. Thus even if I had such forensic accountancy evidence it might not have been very robust.

What I know is that the husband has a track record of establishing ground-breaking companies in the deregulated sector. He made a small fortune by challenging the established providers in the deregulation of one sector. What had at one stage looked like £100 million profit was reduced to only £15 million. With some of the same business partners he then embarked on the establishment of a challenger in another deregulated sector. The chronology of the establishment and development of Zebra makes clear that it had been an entity which was being built for several years even before the husband met the wife. The husband’s principal endeavour in the early days was in developing the various software systems which were integral to the viability of the idea and the acquisition of the licences. Although there may have been difficulties along the way, for instance the bringing in of the software team, this does not detract from the overall assessment of a viable business idea having been developed and well advanced by 2007. I accept the husband’s evidence as to the reasons for dispensing with the IT team and bringing in another team in order to build a system that would be robust for years hence to replace one initially designed by himself which appeared likely to be fragile when confronted with the demands of a mass consumer business.

I accept that the balance sheets are genuine contemporaneous documents. Mr Cusworth QC did not in fact suggest they were modern forgeries. His criticism was that their accuracy in valuation terms was unreliable in part because the methodology used to reach the valuation was not known. However, the 31^st March 2003 balance sheet shows Zebra reflected by a payment to a law firm of £500,000 or €724,000. This I believe was the payment made to acquire the customer base. As at 30^th June 2007, the husband’s private equity investments were valued at €8,999,000 or roughly £6 million. The ZCo schedules suggest that the total value of the other assets held by them totalled some £800,000. The husband said there had not been significant changes in respect of the other holdings. The ZCo schedule shows Zebra Ltd initially valued at £570,000 (original cost). The 2007 balance sheet thus indicates that the Zebra value at that point was £5.2 million. The 2009 balance sheet shows private equity investments of broadly similar valuations. The ZCo balance sheet for 31^st

I do not consider that the original capital investment that the husband made in Zebra of £1.8 million is in any way an accurate reflection of its value as at 2007, still less as at 2009. In 2007 it was ready to fly, it secured the licences to compete in the deregulated sector and it began to trade, making a profit in the year to 2010. This further corroborates the assertion that the business had very significant latent value at an earlier stage. But how does one assess that latent value? If I accept Mr N’s valuation in June 2007 of £5.2 million does that fully reflect the latent potential of the business? If it does how should one index that to reflect its current value. Or should one take the Mostyn J straight line approach to attribute value on the basis of equal accrual year by year since its formation in 2002 until 2017 (I take the later commencement and end year in order to bear on the side of generosity to the wife having regard to the husband’s failure to be full and frank)? The current sums held in respect of Zebra are £36,407,538 and the husband says the total actually received would be around £37.5 million - although the figures appear to vary both within the chronology and within the parties’ documents. If one takes the figure of £37.5 million and undertakes a straight line valuation over the 16 year period some of the figures would be as follows

An alternative method might be to look at the sum invested by the husband and to apply indexation by reference to a high performing comparable stock index such as technology stocks. I identify this only because I conclude that the nature of Zebra was such that it can only sensibly be compared to some index which has demonstrated very high rates of growth. No doubt others could be identified by the parties. To link Zebra to something like the FTSE 100 index or any other mainstream index would in no way be a fair comparison. If one took the husband’s investment of £1.8 million in 2009 (H had put in £500,000 and invested a further £1.9 million in 2009 some of which was repaid and so this year perhaps represents the high point of his financial investment) and applied the NASDAQ technology index from 2009 to 2018 results in that figure being multiplied by 7.04 giving a figure of £12.672 million out of the total of £38.5 million.

An alternative might be to take the starting point of £5.2 million in 2007 and apply some form of indexation. If one used the NASDAQ for 2007 (it was higher then than in 2009) the indexation would be £20.5m.

Other methods might also be attempted for instance those considered by Mr Mr Marks QC and Miss Singer in paragraph 54.3.

It is immediately apparent that seeking to undertake any sort of arithmetical valuation may result in significantly different outcomes depending on the starting points for dating and valuation used.

In all the circumstances I do not consider on the evidence that it is possible for me to undertake a reliable valuation of the latent potential of the business or to apply any sort of indexation to it for passive growth. In the circumstances I am confronted with it seems to me that an alternative approach is mandated. It is quite plain that the business had very considerable latent value whether at 2007 or 2009 the point at which I think the premarital relationship had crossed the Rubicon into quasi marital territory. After that the husband worked hard in the business to develop it from its fledgling status in the mass consumer market to the point in 2012 when he handed over to a CEO with greater experience in that sort of industry than he had. However he continued to play a role whilst the business built on those original foundations to become the company spoken of in the business press article and subsequently becoming the target of the purchase. Thus the part of the husband’s interest in Zebra which predated the marriage and which should properly be considered as the nonmarital portion of the whole is a very significant part of it. On the other hand the part which was developed during the quasi marital relationship and the marriage was also a very significant part of it, albeit somewhat greater. I consider that the two should be assessed so as to apportion 40% of the value of Zebra to the husband as a non-marital asset and 60% as a marital asset. 40% of £37.5 million is £15 million. 60% of £37.5 million is £22.5 million. By crosschecking these figures against the sorts of figures produced by the various other methodologies I am fortified in my conclusion that the husband’s premarital asset is properly valued at in the region of £15 million. In adopting this approach I am very much taking the non-formulaic approach.

This takes into account the latent value or springboard value and the element of passive growth both during periods in which the husband was active and inactive over the period. The £22.5 million portion also properly reflects the periods when the husband was very active and productive of value when CEO and when handling negotiations and also those periods when his involvement was more hands off.

So returning to the agreed list of issues my conclusions are as follows

Whether the parties separated in February 2017 (per H) or September 2017 (per W)? Per H, the extent to which the answer to this question matters, beyond its potential tax impact.

Children of the Family: the extent to which this classification applies to any of the children in this case and what impact, if any, this classification may have in the section 25 exercise. (per H, no relevance; per W, relevant to assessing the pre-marital relationship and W’s and WD’s needs).

The standard of living during the marriage and the extent to which this factor may inform an assessment of need.

Available resources.

Contributions:

Sharing:

Needs:

Per W: interim maintenance:

Outcome:

I remind myself that ultimately the search is always for what are the requirements of fairness in the particular case. It is achieving fairness as between the parties given the particular factual matrix that their marriage took place within, that is the aim. Not fairness as viewed by the modern-day equivalent of ‘the man on the Clapham omnibus’ but fairness judged by the standards of this particular couple in their particular circumstances having regard to the principles contained in the MCA 1973 as explained by the House of Lords. In reaching my decisions above I have sought to apply the principles of sharing, needs and compensation on a non-discriminatory evaluation as outlined by the House of Lords in White and Miller, and have sought to apply the section 25 factors to the factual matrix as I determined it to be having regard to the guidance from the authorities I have referred to. I have sought to undertake various cross-referencing analyses in order to test the outcome. I am entirely satisfied that it is right that a significant portion of the value of Zebra represents a non-marital asset that the husband owned prior to the commencement of the relationship or the transition of the relationship into a quasi-matrimonial one and that in respect of the non-marital asset no sharing issue arises. In respect of my departure from equality in respect of the sharing of the matrimonial assets, I am satisfied that it is both essential to make an adjustment and that the adjustment I have made is fair. As I anticipated at the case management hearing I have had to deploy a broad brush rather than a fine sable, but standing back and viewing the result with the perspective of a broad horizon, I am satisfied that the outcome is fair to both the wife and to the husband. I have not sought to address each and every argument made by the parties’ legal teams – I do not consider it proportionate to do so. My aim in this judgment is to reach a decision and to explain it in a way which allows the parties to understand why I have reached the conclusions that I have.

As an endnote, this case did not require me to consider in any particular detail the needs of the children although I heard quite a lot about them. WD (concluded as a child of the family) and HD (not a child of the family) are no longer minors with HS (not a child of the family) still a minor. Whatever the price the wife and the husband have paid emotionally as a result of the breakdown of their marriage and whatever the cost financially to them of this process, having seen WD I have little doubt that the emotional price the children have paid individually and collectively is far higher. I hope that following the conclusion of this case the parties will be able to redirect their energies away from the money and dedicate them to something infinitely more valuable in the form of their children.

That is my judgment.

Procedural chronology

February 2018 W application to set aside order of DJ Ashworth made on

February 2018 Order of Keehan J[1/B17]

February 2018 H applies for a non-molestation order on notice

February 2018 Order of DJ Duddridge[1/B26]

May 2018 Order of Moor J[1/B44]

May 2018 H’s s.25 document [1/C200]

May 2018 H’s replies to W’s schedule of deficiencies [1/C265]

May 2018 H’s further replies to W’s schedule of deficiencies [2/C272]

May 2018 Private FDR Appointment before Nigel Dyer QC