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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (other Judges) >> GR v AR [2025] EWFC 143 (B) (10 March 2025)
URL: http://www.bailii.org/ew/cases/EWFC/OJ/2025/143.html
Cite as: [2025] EWFC 143 (B)

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IMPORTANT NOTICE: This judgment was delivered in private. The judge has given leave for this version of the judgment to be published on condition that (irrespective of what is contained in the judgment) in any published version of the judgment the anonymity of the children and members of their family must be strictly preserved. All persons, including representatives of the media and legal bloggers, must ensure that this condition is strictly complied with. Failure to do so may be a contempt of court.
Neutral Citation Number: [2025] EWFC 143 (B)

IN THE CENTRAL FAMILY COURT

Date: 10th March 2025
Revised: 20th March 2025

B e f o r e :

His Honour Judge Edward Hess
(sitting as a Deputy High Court Judge)

____________________

GR
Applicant
- and -

AR
Respondent

____________________

Mr Morgan Sirikanda (Counsel instructed by LMP, Solicitors) appeared on behalf of the Applicant husband.
Mr James Roberts KC and Ms Lucia Crimp (Counsel instructed by Family Law Partners, Solicitors) appeared on behalf of the Respondent wife.

____________________

HTML VERSION OF WRITTEN JUDGMENT OF HIS HONOUR JUDGE EDWARD HESS (SITTING AS A DEPUTY HIGH COURT JUDGE) DATED 10TH MARCH 2025 (AS AMENDED ON 20TH MARCH 2025)
____________________

Crown Copyright ©

  1. This case concerns the financial remedies proceedings arising out of the divorce between GR (to whom I shall refer as "the husband") and AR (to whom I shall refer as "the wife").
  2. The case proceeded to a final hearing over three days on 4th, 5th and 6th March 2025.
  3. Both parties appeared before me by Counsel. Mr Morgan Sirikanda (Counsel instructed by LMP, Solicitors) appeared on behalf of the husband. Mr James Roberts KC and Ms Lucia Crimp (Counsel instructed by Family Law Partners, Solicitors) appeared on behalf of the wife.
  4. I am grateful to all Counsel and the wider legal teams for the helpful, clear and professional way they have prepared material for the court and conducted the cases on behalf of their respective clients. Both parties have been represented before me at a first-class level, with excellent document preparation and fine advocacy; but it has, of course, come at a cost. The husband has incurred a total of £348,458 in legal costs and the wife a total of £528,735. This is on top of the substantial costs they must each have incurred in related Children Act 1989 proceedings, though I have been given no figures for this. It is very sad that these two pleasant and highly impressive individuals have found it so difficult to compromise their differences.
  5. The court was presented with an electronic bundle running to 1,042 pages and a number of other documents have been exchanged during the final hearing. I have considered all the documents presented to me, in particular I have considered:-
  6. (i) A collection of applications and court orders.
    (ii) Material from the husband including his Form E dated 23rd February 2024, his answers to questions and replies to a schedule of deficiencies, his 'contributions' statement dated 26th June 2024 and his 'section 25' statement dated 21st January 2025 (as amended on 14th February 2025).
    (iii) Material from the wife including her Form E dated 20th February 2024, her answers to questions and replies to a schedule of deficiencies, her 'contributions' statement dated 26th June 2024 and her 'section 25' statement dated 22nd January 2025.
    (iv) Material from various SJEs on valuation and taxation issues.
    (v) Properly completed ES1 and ES2 documents.
    (vi) Selected correspondence and disclosure material.

  7. I have also heard oral evidence from the wife and the husband, subjected to appropriate cross-examination.
  8. I have also had the benefit of full submissions from each counsel in their respective opening notes and their closing partly written and partly oral submissions. I confirm I have received and read the written submissions sent on both sides on 7th and 10th March 2025.
  9. The history of the marriage is as follows:-
  10. (i) The wife is aged 47. She was born and brought up in significant poverty in country X, impressively progressing to a top university level there on her talent and hard work. She then moved to England in 2001 and later became a dual citizen and continues to live in England. In the years that have followed her arrival she has had a phenomenally successful business career in England in the field of asset management and investment analysis, working for ABC Company from 2005 to 2022. She has managed to achieve this despite having gone through IVF treatment for the birth of her only child and also suffering from three serious bouts of cancer (breast cancer first appeared in 2010 and reappeared in 2018, and treatment for thyroid cancer in 2019) which have required highly invasive and debilitating medical treatments and for which she is at present in remission, though of course ever conscious of its possible reappearance. She stepped back from her asset management work for ABC Company in 2022 on health grounds, though now works as a part-time non-executive director.
    (ii) The husband is aged 41. He was born in country Y, but later his family moved to the USA and he is a US citizen. After his education he began what was also a very successful business career, working from 2006 for a substantial private equity firm DEF and from 2015 as CEO of G company, which he impressively rescued from a poor financial position and guided through to its sale in 2019. He moved to England while working for DEF in 2009 and has lived in England since then. He stepped down from G company on its sale in December 2019 and his abilities appear to be highly regarded in the business world. In the period since 2019 he has been offered more than one very highly paid employment role, including being head-hunted for a CEO role, but has declined all remunerative employment offers. On his own assessment, he has made the beneficent choice to prioritise spending time with his family over earning money. The wife sees a darker motivation, believing the choices as having been made to position himself advantageously in relation to the divorce as the relationship began to break down in 2020. Either way, he has not had remunerative employment since December 2019.
    (iii) The parties met in June 2009 and started a relationship, the precise details of which are disputed, but in relation to which it is common ground that no seamless pre-marital cohabitation began before September 2013.
    (iv) Nonetheless, the parties began properly cohabiting in September 2013. They cohabited in a home purchased by the wife in her sole name in April 2013.They became engaged in October 2013 and married on 22nd May 2014.
    (v) The marriage produced one child, C, who is now aged 7. After extensive disputes in Arbitration (before Barbara Mills KC, culminating in an Arbitral Award dated 31st May 2024), and later in the Central Family Court, the legal situation is that C's care is divided broadly equally between the parties.

    (vi) Unfortunately, the marriage ran into difficulties in its later years and it is common ground (and recorded in the agreed chronology) that the parties 'separated' in October 2022 (although remained living under the same roof until September 2023).
    (vii) Divorce proceedings were commenced by the husband issuing a divorce application on 25th October 2022. A Conditional Order (Decree Nisi) was ordered on 11th April 2023. The final divorce order (Decree Absolute) awaits the outcome of the financial remedies proceedings and is not, in itself, controversial and my order can contain the usual direction permitting the application for a final divorce order.
    (viii) It is common ground that the 'duration of the marriage' for the purposes of the financial remedies proceedings was from 1st September 2013 to 25th October 2022, a period of just over nine years. It does not therefore fall into the category of a 'short marriage'. The 'family home' throughout this period was the property owned by the wife.
  11. The financial remedies proceedings chronology is as follows:-
  12. (i) The husband issued his application by Form A on 29th November 2023.
    (ii) Forms E were exchanged in February 2024.
    (iii) A First Appointment was heard by Recorder Nice on 26th March 2024.
    (iv) The parties exchanged witness statements on 'contributions' in June 2024 and questionnaires and schedules of deficiencies were answered.
    (v) A fully engaged private FDR took place on 23rd July 2024 before Elizabeth Clarke; but sadly no settlement was reached.
    (vi) A post-pFDR directions hearing took place before me on 4th September 2024. I timetabled the case for trial in March 2025.

    (vii) Narrative statements were exchanged in January/February 2025.
    (viii) I heard a PTR on 4th February 2025.
    (ix) A final hearing has taken place before me on 4th, 5th and 6th March 2025. The hearing had initially been scheduled to last four days, but because almost all of the factual and computational issues were in the end agreed it was possible in the end to reduce this to three days, but still to leave more than adequate time to explore all the disputed issues in cross-examination and submissions. My task is largely to determine the distributional issues.

  13. In dealing with the application, I must, of course, consider the factors set out in Matrimonial Causes Act 1973, sections 25 and 25A, together with any relevant case law.
  14. Matrimonial Causes Act 1973, section 25, reads as follows:-
  15. (1) It shall be the duty of the court in deciding whether to exercise its powers under section 23, 24, 24A or 24B above and, if so, in what manner, to 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 who has not attained the age of eighteen.

    (2) As regards the exercise of the powers of the court under section 23(1)(a), (b) or (c), 24, 24A or 24B above in relation to a party to the marriage, the court shall in particular have regard to the following matters:-
    (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) in the case of proceedings for divorce or nullity of marriage, 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.
  16. It is common ground that, in view of the capital available for distribution, this is not a case for any spousal periodical payments so that Matrimonial Causes Act 1973, section 25A issues do not arise.
  17. Accordingly, I bear in mind that I must give first consideration to the welfare while a minor of any child of the family who has not attained the age of eighteen. In this case, this obviously applies to C. It is therefore necessary for me to consider how his respective needs and interests will affect this case, though the amount of capital each party will end up with (however I decide the case) means that neither party will have any difficulty in meeting his needs in the periods in which he is in their respective care, so his needs do not play a large part in the determination of the outcome of the case. For the time being at least, the parties agree that he should be attending a state school, so there are no school fees issues for me to decide. The parties have agreed in principle to share in some of C's costs ongoing where they will have a mutual interest and, although they were unable to agree on the precise wording of this, the draft order I am sending out with this judgment suggests a compromise of wording around which I hope they will be able to unite.
  18. In relation to the "property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future" almost all of the figures, though relatively large, are uncontroversial and the ES2 is a carefully constructed and (happily) almost wholly agreed document.
  19. There are a small number of residual issues which could not be agreed, and which I propose to determine as follows:-
  20. (i) There had been a consensus that all of the parties' chattels (the division of which is agreed and has not been controversial in the case) would be omitted from the ES2 and that neither party would argue that the other was to be left with chattels at a greater value than the other. Amongst the items left with the husband was a valuable watch which the wife had given him in happier times, though there was no objective evidence of its particular value. This consensus was disturbed by the wife's purchase of a watch for herself for £30,928 in January 2025. The husband wished this to appear at purchase value on the ES2 to be taken into account in any distributional calculations. In similar vein, the husband also identified another £190,714 which he sought to characterise as "significant and abnormal transactions between October 2024 and January 2025" which should be added back and taken into account in any distributional calculations. His case was that, whilst this did not amount to "wanton dissipation", these were purchases targeted at manipulating the asset schedule. The wife vehemently took objection to the husband's case in this regard, suggesting that these transactions were just part of the normal conduct of her life and were counter-balanced by equivalent spending decisions made by the husband over the past few years. On this dispute I have decided, on balance, to prefer the wife's position. I have not been persuaded that these transactions were such, in all the circumstances of the case, to place them in a different category from many other transactions which took place in this family and my conclusion is that to attach particular significance to them would not be fair to the wife. I shall therefore not include the husband's proposed figures (for add-back and for the watch) in my asset schedule.

    (ii) The husband has also sought in a similar way to argue that the gift of $200,000 (£165,840) by the wife to her mother in January 2023 should be added back into the ES2 to be taken into account in any distributional calculations. The timing of the gift, being just after the separation, is part of his complaint. The wife has responded powerfully by pointing out that her mother gave (in total) more than three years of unpaid care to her when she was suffering from cancer and after C was born and that she had long since promised a gift of this nature to her. She also suggested that the gift was counter-balanced by various pieces of financial assistance that the husband had provided for his parents (for example, spending money on his property to make it wheelchair accessible for the benefit of his mother). Again, I have decided on this dispute, on balance, to prefer the wife's position. I have not been persuaded that this gift was such, in all the circumstances of the case, to place it in a different category from other transactions carried out by the husband and my conclusion is that to attach particular significance to it would not be fair to the wife. I shall therefore not include the husband's proposed add-back figure in my asset schedule.

    (iii) I have decided that the inter partes costs order of £12,500 made in the Children Act proceedings against the wife should not feature in my asset schedule as her debt in my asset schedule (to do so would be to undermine the purpose and efficacy of the costs order and is wrong in principle, and I think Mr Roberts in the end conceded this). I have not been persuaded, however, that the wife's outstanding financial remedies costs liability of £57,666 should be excluded from the schedule. Although the wife's legal costs are higher than the husband's, I have not been persuaded that the differential here is such as to place it in the category of cases where an adjustment is appropriate to reflect disproportionate over-spending (see, for example, YC v ZC [2022] EWFC 137).
    (iv) In relation to the dispute as to what figure should be included as the wife's income tax liability for the tax y/e 5th April 2025, I have been persuaded that the correct figure is £204,888 as this debt almost entirely relates to income already received rather than income yet to be received in what remains of the tax year. I shall use this figure in my schedule.

  21. Having made these determinations, I am now able to set out my assessment of the assets and debts available for distribution in this case.
  22. The situation can be summarised as follows:-
  23. REALISABLE ASSETS/DEBTS

    Joint

    HSBC account 1 392
    HSBC account 2 0
    TOTAL 392

    Husband

    London flat[1] 1,261,000
    Bank accounts in sole name 3,003,238
    Investments/Policies in sole name 277,917
    Business interests in sole name 2,780
    Other investments/Interests 285,487
    Liabilities -84,983
    Outstanding Legal Costs [2] 0
    Pensions 344,610
    TOTAL 5,090,049

    Wife [3]

    Family home[4] 2,016,836
    Properties in country X purchased in July 2013 [5] 138,368
    Properties in country X purchased in November 2019 [6] 384,435
    Swiss Bank accounts in sole name 25,289,135
    Other Bank accounts in sole name 167,579
    Swiss Investments/Policies in sole name 8,753,057
    Other Investments/Policies in sole name 524,341
    Business interests in sole name 6,890
    Other investments/Interests 12,865
    Liabilities -2,497,640
    Outstanding Legal Costs [7] -57,666
    Pensions 1,380,312
    TOTAL 36,118,512

  24. The open positions of the parties are as follows:-
  25. (i) The husband's open position, essentially that set out in the LMP letter of 21st February 2025, but developed slightly at trial, is that:-
    (a) The country X Properties currently in joint names should be transferred to the wife.
    (b) The joint accounts should be closed and the proceeds divided equally.
    (c) The chattels should be divided as agreed.
    (d) He will undertake to vacate the garage space that he currently occupies which is opposite the wife's home within 12 months, though he is willing to be bound by my determination of what is a fair period to do this and still give the undertaking.
    (e) There should be a paragraph in my order recording a consensus on future joint spending on C.
    (f) The wife's Avios and Marriott Bonvoy points should be shared equally between the parties unless the terms and conditions under which they are held prevent this.
    (g) The wife should pay a lump sum to the husband of £14,950,073 (marginally amended in closing to £14,956,323) within 10 days.
    (h) All other assets should remain as they are on a clean break basis.
    (i) Costs should be considered in light of the court's determination of the outcome of the case.

    (ii) The wife's open position, essentially that set out in the Family Law Partners letter of 21st February 2025, but developed slightly at trial, is that:-

    (a) The country X Properties currently in joint names should be transferred to the wife.
    (b) The joint accounts should be closed and the proceeds divided equally.

    (c) The chattels should be divided as agreed.

    (d) The husband should undertake to vacate the garage space that he currently occupies which is opposite the wife's home within 3 months.

    (e) There should be a paragraph in my order recording a consensus on future joint spending on C.

    (f) The wife should retain all her Avios and Marriott Bonvoy points.

    (g) The wife should pay a lump sum to the husband of £7,564,025 (marginally amended to £7,541,442 in closing) within 60 days.

    (h) All other assets should remain as they are on a clean break basis.

    (i) Costs should be considered in light of the court's determination of the outcome of the case.

  26. I have been presented with a draft order which records an agreed structure of order, leaving me with a limited number of matters to determine. Two matters (the time for the husband to vacate the garage and the division of Avios and Marriott Bonvoy points) are relatively minor. This leaves the third matter, the level of the lump sum payment, as the major issue for me to determine and I shall first turn to the resolution of this issue.
  27. The determination of this issue turns on how the court should apply 'the sharing principle' to the facts of this case and there is a significant body of case law on this subject, which I shall now address.
  28. This principle of course has its genesis in the House of Lords decisions in White v White [2000] UKHL 54 and Miller v Miller; McFarlane v McFarlane [2006] UKHL 24. In the words of Lord Nicholls the principle "derives from the basic concept of equality permeating a marriage as understood today…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". An important feature of this principle is that it promotes equality between, and disapproves discrimination between, the money-earner and the home-maker. It is right to observe that in many of the reported cases on this issue the money-earner is the husband and it is the wife seeking a payment from the husband; but the principle is of course gender neutral and applies just as much when the money-earner is the wife.
  29. The correct approach to quantifying any such claim is to value the assets at the date of the trial (see, for example, Lord Mance in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24) and then seek to distinguish between assets which are matrimonial and those which are non-matrimonial. As a strong starting point, the matrimonial assets should be divided equally and the non-matrimonial assets left with the party who contributed them. In the words of Mostyn J in JL v SL [2014] EWHC 3658:-
  30. "A key component of fairness is drawing the distinction between matrimonial and non-matrimonial property…Matrimonial property is the property which the parties have built up by their joint (but inevitably different) efforts during the span of their partnership. It should be divided equally. This principle is reflected in statutory systems in other jurisdictions. It resonates with moral and philosophical values. It promotes equality and banishes discrimination…These arguments do not apply to property received or created outside the span of the partnership, or gratuitously received within the partnership from an external source. Such property has little to do with the endeavour of the partnership and the equal sharing principle as explained by Lord Nicholls just cannot apply to it on any moral or fair basis…For obvious reasons the span of the partnership is looked at de facto and not de jure. It is not looked at from the date of the marriage to the date of decree absolute. Rather it is measured from when the cohabitation began on a permanent basis until the date of the separation. Given that a claim to share non-matrimonial property (as opposed to having a sum awarded from it to meet needs) would have no moral or principled foundation it is hard to envisage a case where such an award would be made. If you like, such a case would be as rare as a white leopard…This seems to me to mandate that the court should always attempt to determine the partition between matrimonial and non-matrimonial property. Once it has done so the matrimonial property should usually be divided equally and there should usually be no sharing of the non-matrimonial property".

  31. Determining the partition between matrimonial property and non-matrimonial property is, however, not always straightforward (as the facts of the present case illustrate). The general approach that the court should adopt for this task is set out in some detail in the judgment of Moylan LJ in Hart v Hart [2017] EWCA Civ 1306, including the following thoughts:-
  32. "[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.

    …

    [84] In my view, the court is not required to adopt a formulaic approach either when determining whether the parties' wealth comprises both matrimonial and non-matrimonial property or when the court is deciding what award to make. This is not necessary in order to achieve 'an acceptable degree of consistency', Lord Nicholls of Birkenhead in Miller at para [6], or to achieve a fair outcome. Indeed, I consider that the present case demonstrates the difficulties which can arise if a court strives to adopt a formulaic approach in circumstances where that is not likely to be easily achieved because of the nature of the financial history.

    …

    [86] In my view, the guidance given by Lord Nicholls of Birkenhead in Miller remains valid today and, indeed, bears increased weight in the light of the courts' experience since that case was decided. It can, as he said, be artificial to attempt to draw a 'sharp dividing line'. Valuations are a matter of opinion on which experts can differ significantly. Investigation can be 'extremely expensive and of doubtful utility'. The costs involved can quickly become disproportionate. Proportionality is critical both because it underpins the overriding objective and because, to quote Lord Nicholls of Birkenhead again: 'Fairness has a broad horizon'.

    …

    [90] It may be, for example, that the external contribution can immediately be seen to be sufficiently insignificant in the context of the case that it warrants no further inquiry. It may be, at the other end of the spectrum, that there is clearly no matrimonial property so that there is also no need to undertake any further factual investigation. In other words, if the facts clearly demonstrate the existence of a 'sharp dividing line' the court will use that line for the purposes of determining what award to make. If, on the other hand, the inquiry would require an account to be undertaken of the marriage and/or some other expensive investigation and/or would be of 'doubtful utility', the court could be expected to decide that such an inquiry was neither proportionate nor required to enable the court to achieve a fair outcome. If some further inquiry is warranted, the court will have to determine what 'degree of particularity or generality' is required. Where, in the spectrum, any particular case lies is for the court to decide.

    ….

    [92] The court may decide that the non-marital contribution is not sufficiently material or bears insufficient weight to justify a finding that any property is non-matrimonial.

    [93] Alternatively, if the evidence establishes a clear dividing line between matrimonial and non-matrimonial property, the court will obviously apply that differentiation at the next, discretionary stage.

    [94] If, however, at the other end of the spectrum, there is a complicated continuum, it would be neither proportionate nor feasible to seek to determine a clear line….In those circumstances, the court will undertake a broad evidential assessment and leave the specific determination of how the parties' wealth should be divided to the next stage. As I have said, where in the spectrum a case lies depends on the circumstances of the case and is for the judge to decide.

    [95] The third and final stage of the process is when the court undertakes the s 25 discretionary exercise. Even if the court has made a factual determination as to the extent of the parties' wealth which is matrimonial property and that which is not, the court still has to fit this determination into the exercise of the discretion having regard to all the relevant factors in this case. This is not to suggest that, by application of the sharing principle, the court will share non-matrimonial property, but the court has an obligation to determine that its proposed award is a fair outcome having regard to all the relevant s 25 factors.

    [96] If the court has not been able to make a specific factual demarcation but has come to the conclusion that the parties' wealth includes an element of non-matrimonial property, the court will also have to fit this determination into the s 25 discretionary exercise. The court will have to decide, adopting Wilson LJ's formulation of the broad approach in Jones, what award of such lesser percentage than 50% makes fair allowance for the parties' wealth in part comprising or reflecting the product of non-marital endeavour. In arriving at this determination, the court does not have to apply any particular mathematical or other specific methodology. The court has a discretion as to how to arrive at a fair division and can simply apply a broad assessment of the division which would affect 'overall fairness'. This accords with what Lord Nicholls of Birkenhead said in Miller and, in my view, with the decision in Jones.

    [97] Finally, I would repeat that fairness has a broad horizon."

  33. In carrying out the above exercise, a family home typically (though not always) falls into a different category from other assets. In the words of Lord Nicolls in Miller v Miller; McFarlane v McFarlane [2006] UKHL 24: "The parties' matrimonial home, even if this was brought into the marriage at the outset by one of the parties, usually has a central place in any marriage. So it should normally be treated as matrimonial property for this purpose. As already noted, in principle the entitlement of each party to a share of the matrimonial property is the same however long or short the marriage may have been." As Moylan LJ said in Standish v Standish [2024] EWCA Civ 567: "…the court will typically conclude that the former matrimonial home should be shared equally although this is not inevitable as shown by cases such as FB v PS [2015] EWHC 297". An odd feature of the present case is that the husband has not sought to rely upon this well-established principle when it would have been to his advantage to do so (though his mathematics suggest a different route); but, even so, I do not think it would be right for the court to overlook this principle.
  34. A feature of Mr Roberts' presentation has been that he has invited me to attach significance to the way in which the parties, throughout the marriage, kept their finances very separate, even to the extent (for example) of deliberately splitting restaurant bills equally between themselves. The presentation, though somewhat eschewing the authority itself, invited the court to follow the reasoning of McFarlane LJ (as he then was) in Sharp v Sharp [2017] EWCA Civ 408 to the effect that such a practice should be treated as being influential in applying the sharing principle. Later cases have sought rather to disown Sharp v Sharp as being very much limited to its narrow facts. In any event the present case does not involve a short, childless marriage and I think Mr Sirikanda is correct to suggest that the later judgment of Moylan LJ in XW v XH [2020] 1 FLR 1015 should, in the present case, steer me away from this course. In the words of Moylan LJ in XW v XH:-
  35. "[138] This leaves the second category Baroness Hale of Richmond identified, namely great wealth 'generated by the business efforts and acumen of one party'. It is the 'nature and source of the property' which are the key features identified as potentially justifying the asset being 'separate property' which is not 'automatically … shared equally', at para [153]. On this issue, I agree with the husband's written submission that this is not a fragmented issue. The manner in which the parties have run their lives, by for example pooling the asset or not, is a subsidiary element of the same factor which depends on there being property which, because of its nature and source, may potentially not be shared equally. It is subsidiary because it only relates to whether the way in which such property has been used in the marriage might affect the question of whether it remains 'separate property'. I would add that it would be far too vague as a freestanding factor and, in any event, would be difficult to apply as such given the manner in which the Supreme Court has set out in Radmacher the required circumstances before the court will give effect to a marital agreement."

  36. How, therefore, should I decide which of the assets which exist on the above schedule are matrimonial and which are non-matrimonial?
  37. At the First Appointment, Recorder Nice helpfully directed that the parties should provide a detailed summary of their asset and debt position as at 1st September 2013. The parties complied with this direction and the outcome of this exercise (which was not challenged at trial) can be summarised in the following table.
  38. REALISABLE ASSETS/DEBTS AS AT 1 SEPTEMBER 2013

    Husband

    Bank accounts in sole name 849,068
    Investments/Policies in sole name 2,625,115
    Business interests in sole name 1,393,370
    Liabilities -91,557
    Pensions 122,940
    TOTAL 4,898,936

    Wife

    Family home[8] 680,000
    Properties in country X purchased in July 2013 [9] 63,806
    Bank accounts in sole name 531,313
    Investments/Policies in sole name 1,084,005
    4,470 shares in ABC Company 3,454,768
    Loan from ABC Company in relation to share purchases -2,393,076
    C Stock 64,103
    Z Pension 37,494
    ABC Company Pension 447,585
    TOTAL 3,969,998

  39. The overall change in the position between September 2013 and now can be summarised in the following table, illustrating that in the intervening time the husband's assets have more or less flat-lined and the wife's have substantially increased.
  40. TOTAL NET ASSETS As at September 2013 Now
    Husband 4,898,936 5,090,049
    Wife 3,969,998 36,118,512

  41. In fact, a table produced in December 2019 by the husband shows that he did increase his asset position up to that time to £6,260,860; but that, once he gave up remunerative employment and lived off capital, his asset position declined (as one would perhaps expect, assuming no change in outgoings). This decision can be presented in a positive light (he has devoted more time to caring for C, his commitment to C being properly approved and noted in the Children Act Arbitral Award of Barbara Mills KC) or in a negative light (he has unjustifiably failed to maximise his earning capacity by turning down very lucrative employment opportunities). The reality is that his decision not to work since December 2019 does not fall overwhelmingly into one category or the other and both presentations have a degree of force. This situation must go into the overall balance of circumstances in the assessment of fairness, for if he had maximised his earning capacity his accretion of marital wealth could have been substantial and would have been set off against that of the wife.
  42. The definition of non-matrimonial property articulated by Mostyn J in JL v SL (supra) was "property received or created outside the span of the partnership". In Hart v Hart (supra) Moylan LJ said: "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".
  43. The simplicity of these definitions is more obvious in their formulation than in their application to individual cases where assets have been accrued and moved about and spent and invested and realised and reinvested in a myriad of ways over quite a long period of time. I have been presented with very different and detailed analyses from each party which are lay client rather than lawyer driven and reflect the fact that each party is experienced at preparing complex spreadsheets in their respective business lives. These analyses, on their face, are very mathematically precise methodology suggestions by each side to justify the lump sum figure sought, but neither for me really represents either a mathematically reliable outcome or, overall, a fair or justifiable way of approaching the problem and the mathematical precision is something of an illusion. In the end I have reached the conclusion, following the thoughts of Moylan LJ in Hart v Hart (supra), that I should make a broad assessment of the situation overall, observing that fairness has a broad horizon. It must be right to observe that the large accretion of wealth by the wife partly counts as marital acquest and partly does not; but putting a precise formulaic mathematical figure on it is simply not possible, there is no clear demarcation line in this case.
  44. At the top of the list of complicating factors is the way in which the wife accrued the majority of her assets via her shares in ABC Company. ABC Company is a very large asset management company owned by its shareholders. Some of the shareholders are what has been described as "founders" who do not necessarily work in the business. Other shareholders are employees of the company, but only those who have proved themselves with stellar performances over a period of time which establish them as a particularly valuable employee. When they reach this position, the employees are offered shares at a prescribed value, year on year, until they are no longer considered to qualify as a stellar employee. It is likely to be advantageous to the employee to have the shares offered, so the impression I have is that offers of shares are almost always accepted with alacrity. The share sale does not (with a small exception) involve any actual payment by the employee, but rather a loan from ABC Company representing the whole of the share purchase price. The loan has a fixed rate of interest and has some of the characteristics and risks of a normal commercial loan, but (absent an unexpectedly catastrophic deterioration in company performance) it is protected in most circumstances by various safeguards within the terms and conditions of the arrangement. Repayments of the loan are deducted by ABC Company both from performance bonuses and share dividends otherwise receivable by the individual employee. Over time it is expected that the loans will be paid off in this way and this is exactly what has happened with the wife.
  45. In the period up to September 2013 (when cohabitation began) the wife acquired 4,470 shares on the dates set out in the table below and the loans taken out in the way just described are also set out in the table below.
  46. Date Number of ABC Company Shares acquired Amount of loan advanced by ABC Company to facilitate share purchase
    30th December 2010 1,200 $1,271,875
    29th June 2011 960 $1,052,721
    30th January 2012 1,350 $1,619,635
    30th July 2012 120 $143,408
    30th January 2013 840 $995,072
    Total number of shares
    as at September 2013 prior to the marriage
    4,470  

  47. The wife continued to accrue shares after the cohabitation began until 2018 as follows.
  48. Date Number of ABC Company Shares acquired Amount of loan advanced by ABC Company to facilitate share purchase
    30th January 2014 750 $991,807
    29th January 2015 810 $1,164,148
    29th October 2015 450 $646,996
    29th September 2016 1,650 $2,426,044
    28th September 2017 1,260 $1,985,218
    27th September 2018 150 $262,956
    Total number of shares during the marriage 5,070  
         
    TOTAL overall 9,540  

  49. After 2018 the wife's work performance began to deteriorate (she became very ill at this stage). Nonetheless, she continued to reduce the amounts of loan outstanding. By June 2022 the final loan repayment was deducted from her dividend, and she was loan free. On her calculations (which in this respect have not been challenged) over the course of 12 years (between 2010 and 2022) approximately 1% of the loan repayments came in direct payments, 47% came from withheld dividends and 52% came from withheld bonuses.
  50. When the wife left her employment with ABC Company , she would ordinarily have been required to sell back all of her shares at a prescribed price. In fact, because of her illness with cancer, this triggered a clause in the contract which gave her the right to hold on to the shares for longer periods, though she did in fact sell all of the shares in the course of 2024 as follows (and for these purposes I prefer the wife's figures to the husband's, which were slightly though not materially different).
  51. Date of sale of shares Number of ABC Company Shares sold Sale proceeds
    July 2024 3,180 £6,558,563
    October 2024 6,360 £12,632,045
    TOTAL 9,540 £19,190,608 less CGT = £17,078,708 net
  52. The sale proceeds were paid into the wife's Swiss bank accounts in her sole name. The sale proceeds have been amalgamated in those accounts with the dividends on those shares that the wife has received before the marriage, over the course of the marriage, and after the separation and this broadly accounts for £22,872,668 (i.e. £25,289,135 less £204,888 less £2,211,579) of the wife's current asset base (i.e. the money in the Swiss Bank accounts less the tax debt yet to be paid). The extent to which this represents 'marital acquest' has been hotly contested in the course of the trial. Mr Roberts has urged me to see that the dominating feature in calculating the non-matrimonial element should be the portion of the ABC Company shares which were held by the wife prior to cohabitation, i.e. 4,470 out of 9,540, i.e. 46.8%. Mr Sirikanda has in contrast urged me to accept that the dominating feature is that only 1,266 of the 9,540 shares were loan free prior to cohabitation, i.e. 1,266 out of 9,540, i.e. 13.3%. He urges me to accept that all the loan repayments made after September 2013 – whether by reference to the withholding of performance bonus or dividend – are in essence the wife's earnings and therefore the product of marital endeavour. The wife's primary position is complicated by the earlier production of a complex mathematical analysis justifying a figure of 73%, but she later abandoned this figure in favour of the 46.8% figure. The husband's primary position is complicated by the production of a complex mathematical calculation which purports to justify a secondary assessment, acknowledging a distinction between the loan repayments by the withholding of performance bonus or by the withholding of dividends. By this methodology (which he has called 'waterfalling') the husband adjusts his figure from 13.3% to 21.7%. The wife was given only a few days to understand his highly complicated spreadsheet justifying his secondary position and (despite being a very distinguished investment analyst) said that she could not follow the assumptions made in the husband's spreadsheet and regarded it as partisan and unreliable. A decision was made not to seek to adduce the spreadsheet into evidence before me. I have reached the conclusion that, making a broad assessment, it is reasonable for me to say that the marital acquest can be assessed as being approximately 2/3 of £22,872,668, i.e. £15,248,445. The remaining 1/3 is attributable to what the wife had by September 2013 and is therefore non-matrimonial property.
  53. I turn to the Swiss and other investments and the pensions. The wife's contributions statement in June 2024 sought to analyse these and her calculations in this statement (page 641 of the trial bundle) are largely, though not entirely, carried over into Mr Roberts' presentation. For example, she explained that a good portion of the rise in the value of her pension was attributable to passive growth rather than additional contributions. Further, she did her best to trace the provenance of the purchase for her investments, including the country X properties purchased in 2019. The husband has carried out his own analysis (page 35 of the trial bundle). Having listened to all the evidence and arguments on this, and again reaching the conclusion that mathematical precision here must remain something of an illusion, and taking a broad view, I have decided that it is reasonable to regard the following items as marital acquest for present purposes:-
  54. (i) 20% of the current value of the wife's Aviva pension, i.e. 20% x £1,298,348 = £259,670.

    (ii) 2/3 of the MI investments, i.e. 2/3 x £4,826,944 = £3,217,962.

    (iii) 1/3 of the MII investments, i.e. 1/3 x £3,926,113 = £1,308,704.

    This makes up a total of £259,670 plus £3,217,962 plus £1,308,704 = £4,786,336.

  55. Taking a view of all the circumstances, I have not been persuaded that the other investments, including the country X properties, represent marital acquest.
  56. It follows from this that I regard the marital acquest in this case as being properly and fairly assessed at £15,248,445 plus £4,786,336 = £20,034,781. As a starting point, the husband can properly argue that this marital acquest should be shared. This would, prima facie, justify a lump sum of £10,017,390.
  57. Further, although the husband presented his case in a slightly different way, I have reached the conclusion that the wife's property (used as the family home) should properly, on the authorities, be regarded as matrimonial property. It was the family home for the entirety of the marriage, just over nine years. Although it was owned solely by the wife throughout, I accept that there were some good tax reasons for that (the husband feared that he may end up paying CGT in the USA on any gain whilst the wife is able in England to claim the Principal Private Residence exemption relief to avoid any CGT). I note also that he was involved in its initial viewing and selection, contributed £100,000 to its initial furnishing and in fact continued to live in the property until September 2023. In my view this conclusion gives rise to a valid claim within these proceedings for a half share in the equity, namely 50% x £2,016,836 = £1,008,418.
  58. If I add these two figures together, this provides justification for a lump sum of £11,025,808. Is there any good reason for me to depart from this figure?
  59. In relation to "the income, earning capacity…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", I should note the following:-
  60. (i) The wife is earning a lot less than she used to because of her health problems, but even working as a part-time non-executive director she is able to earn approximately £100,000 per annum gross. With her pensions and other capital, it could not be said that the wife will have insufficient income in the future to have a comfortable life.

    (ii) The husband has a very substantial earning capacity which he is currently choosing not to exercise. I accept to some extent he is not exercising it because of his wish to spend a lot of time with C and this is understandable up to a point. He may decide in due course to go back to remunerative employment, perhaps when C is a little older and more independent, but even if he does not, he will have sufficient capital to have a comfortable life.

    (iii) My overall view is that the income position does not have much impact on the proper outcome here.

  61. In relation to the "financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future" I have the following observations. These needs should be seen in the context of the other section 25 factors - the standard of living that the parties jointly enjoyed during the marriage, the ages of the parties, the duration of the marriage, the respective contributions of the parties and the loss of potential pension benefits by divorce. Taking a broad view, I conclude that there is enough capital in this case for both parties to be able to meet their future needs with comfort and no particular analysis is required. The only needs argument advanced at all has been that Mr Roberts has advanced a broad proposition that the wife's health position may cause her to spend money on medical treatment in the future and has put forward some speculative figures as to what this might cost on a worst case scenario. I can well understand that this is a concern for the wife, and everybody of course wishes and hopes that her cancer does not return, but I have not been persuaded that this should properly be seen as a factor properly justifying a different outcome on the facts of this case.
  62. Neither conduct nor disability (save in the context of the wife's earning capacity) play a role in this case.
  63. In my view none of these other section 25 factors justify a departure from the lump sum figure of £11,025,808. It is also, however, appropriate for me to step back and carry out a cross-check of fairness. A lump sum at this level would leave the parties in the following capital position.
  64.   Wife Husband
    Own realisable assets 36,118,512 5,090,049
    50:50 division of joint accounts 196 196
    Lump Sum from W to H -11,025,808 11,025,808
    TOTAL REALISABLE ASSETS 25,092,900 16,116,053
    % REALISABLE ASSETS 60.9% 39.1%

  65. My view is that this distribution of assets represents a fair outcome for these parties in all the circumstances of the case. I now turn back to the two relatively minor residual issues which I need to determine.
  66. The first is the issue of the time period which it would be reasonable to insert in the proffered undertaking by the husband to vacate the garage which he has rented for storage purposes and which is opposite the wife's home and which plainly causes her a high degree of distress and irritation (whether or not there is adequate objective justification for this). The husband says he needs 12 months to get out, suggesting that he would like to sell his existing accommodation and purchase new and larger accommodation before being able to vacate the garage. The wife says he should vacate more quickly, pointing out that (if he really cannot store the items in his current accommodation) other storage facilities are available not too far away. She suggests that 3 months is more than adequate to achieve this. On this issue I prefer the position of the wife. I regard the husband's decision not to vacate as being insensitive and stubborn-minded and he should leave as soon as possible. With the capital he will have from my order and the time available to him as he is not working, it should be possible to make other arrangements on the timescale suggested by the wife. I shall therefore insert the time period of 3 months into the proffered undertaking – the husband having helpfully indicated that he would accept my decision on the time period. When he vacates he should also give up the ancillary rights flowing from having the garage – the remote controllers / keys which give him access to the gated road and the garage itself and the membership of the road WhatsApp Group. The parties have been unable to agree a form of words for this and I have included in my draft order a form of words around which I hope they will be able to unite.
  67. The second is the issue of the division of Avios and Marriott Bonvoy points. Having listened to the respective arguments on this I prefer the husband's position. The points, whilst perhaps having no monetary value, are desirable and may well be useful to both parties. It is appropriate to regard them as matrimonial property to which the sharing principle applies. In so far as they are capable of being transferred between the parties (and the evidence suggests that they are) I conclude that they should be shared and will provide for this in my order. I have slightly amended the wording proposed by the husband for achieving this.
  68. My decision is therefore that:-
  69. (i) The Country X Properties currently in joint names should be transferred to the wife.

    (ii) The joint accounts should be closed and the proceeds divided equally.

    (iii) The chattels should be divided as agreed.

    (iv) The husband should undertake to vacate the garage space that he currently occupies which is opposite the wife's home within 3 months of the date of this order.

    (v) There should be a paragraph in my order recording a consensus on future joint spending on C.

    (vi) The wife's Avios and Marriott Bonvoy points should be shared equally between the parties unless the terms and conditions under which they are held prevent this.

    (vii) The wife should pay a lump sum to the husband of £11,025,808. I think the time period of 60 days from the date of the order is reasonable, i.e. 9th May 2025. I think that the normal rule, that interest in default should be payable at the High Court judgment debt rate, is appropriate here.

    (viii) All other assets should remain as they are on a clean break basis.

  70. Counsel have helpfully produced a draft order which has an agreed structure and to which I can now determine the drafting disputes and add the conclusions I have reached above on the substantive points.
  71. In view of my decision on the lump sum (sitting between the two open offers), and in view of FPR 2010, Part 28, I want to give a strong provisional steer that there should be no order as to costs, though I am conscious I have heard no submissions on this yet and I am willing to receive written submissions, if necessary.
  72. I am therefore attaching a draft order around which I hope the parties will unite in the light of my conclusions. If they do, and the undertakings box is suitably signed, and the order is returned to me, I can approve this order forthwith.
  73. For the purposes of the 21-day appeal period, the handing down of the judgment should be regarded as taking place by my sending an email attaching the judgment, which I intend to do today.
  74. I have no strong views on the issue, but my provisional view is that the judgment should be published, but in a redacted and anonymised form. I am happy to receive any representations on this subject. If it is to be published, I would hope that Counsel might be able to agree on the appropriate redactions and anonymisations to be executed before publication.
  75. HHJ Edward Hess

    Central Family Court

    10th March 2025

    As slightly amended on 20th March 2025

Note 1   This figure is based on a value of £1,300,000 less notional sale costs at 3% = £1,261,000     [Back]

Note 2   This figure is based on a total of incurred fees of £348,458 less a total of fees paid of £348,458 = £0    [Back]

Note 3   W also owns 1,376,219 Avios points and 554,201 Marriott Bonvoy points. These plainly have a value in producing future discounts on flight and hotel costs but no attempt has been made in the proceedings to place a monetary value on them.    [Back]

Note 4   This figure is based on a value of £2,600,000 less notional sale costs at 3% less the outstanding mortgage of £502,651 and ERP of £2,513 = £2,016,836     [Back]

Note 5   This consists of Apartment 20 and two related parking spaces. They are held in W’s sole name and were purchased in July 2013.    [Back]

Note 6   This consists of Apartment A310 and a related parking space and two apartments at A501. They are held in the joint names of the parties but are included in W’s column for the present purpose because it is common ground that they will be transferred to her as part of my order. There is a dispute as to how and why they came to be placed in joint names as W paid for them.     [Back]

Note 7   This figure is based on a total of incurred fees of £528,735 less a total of fees paid of £471,069 = £57,666    [Back]

Note 8   This figure is based on a value of £1,980,000 less the outstanding mortgage of £1,300,000 = £680,000     [Back]

Note 9   This consists of Apartment 20 and two related parking spaces. They are held in W’s sole name and were purchased in July 2013.    [Back]

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