England and Wales High Court (Family Division) Decisions

a)                  H to make a lump sum payment to W of £16 million (H to indemnify W as to any tax liability incurred).

b)                   H to transfer a car to W.

c)                   Each party to be solely responsible for all liabilities in their sole names, save that H shall be solely responsible for W’s two litigation/living expenses loans which currently stand at c.£740,000 (including charges and interest).

d)                  Clean break in life and death.

e)                   No order for costs, save that H shall pay W the sum of £11,715 plus interest in respect of the costs order of Mr Justice Moor dated 2 May 2018.

a)                   H to make a lump sum payment to W of £4.85 million (no indemnity is offered by H on the basis that there is no need for one)

b)                  H to pay the balance of W’s reasonable outstanding legal costs; W to be responsible for her litigation loans.

c)                   Clean break in life and death.

d)                  No order for costs, save that H shall pay W the sum of £11,715 plus interest in respect of the costs order of Mr Justice Moor dated 2 May 2018.

List of agreed issues

1. 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).

2. 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.

3. 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).

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

5. Available resources.

(a)     Whether H (including via ZCo) has received full payment in respect of his Zebra options (including whether there are any retention payments).

(b)    Whether H’s gift of c.£100,000 to his brother in August 2018 should (per W) be included as H’s asset for the purposes of these proceedings or (per H) be excluded from the asset schedule.

(c)     Whether H’s gift of a car worth £50,000 to his father should (per W) be included as H’s asset for the purposes of these proceedings as conceded by H in replies to questionnaire or (per H) be excluded from the asset schedule.

(d)    Whether (per H) ZCo owes a debt of £522,270.

(e)     Whether (per W) the prospect of H paying UK CGT on disposal of his Zebra shares is too remote and therefore should be ignored or (per H) the possibility of H paying CGT means that this potential liability should be deducted on the asset schedule.

6. Contributions:

1. The parties’ respective contributions during the premarital relationship from late 2007 to September 2013.

2. The extent of H’s pre-marital wealth.

3. The weight to be attached to H’s contribution of pre-marital wealth.

7. Sharing:

(a)    Whether (per W) W is entitled to share in the growth in value in Zebra during the relationship, or (per H) W’s claims are to be assessed by reference to her reasonable needs.

(b)    Whether sums that H brought into the relationship, but which were spent on living expenses during the relationship and no longer exist are (per W) mingled and spent, therefore not capable of being “ringfenced”; or (per H) a relevant and unmatched ‘contribution to the welfare of the family’ impacting on the fairness of sharing what now remains.

(c)     The extent to which the value of H’s shareholding in Zebra derived from contributions that he made before the date of the marriage/relationship and the extent to which the value derived from contributions made after the date of the marriage/relationship. Per H, (a) whether it is desirable or possible reliably to assess when Zebra’s major value was built up or when H’s contributions were principally made and (b) if it is, the utility of those inquiries in the circumstances of this case.

(d)    The value of H’s interest in Zebra before the parties began to live together/were married. Per W: H has failed to provide any reliable evidence about this. Per H: probably only broadly relevant to outcome and not capable of being established definitively. Per W, in the absence of such evidence, the court should take a broad view on the best available evidence; bearing in mind that if there were any evidence available to suggest that H’s contribution was greater than the £2.2m which he has claimed for tax purposes, no doubt he would have produced it.

(e)     How H’s contributions before the start of the marital relationship to the development of Zebra can or should be reflected in the final outcome?

8. Needs:

(a)    The parties’ respective housing and other capital needs. Per W, these should be informed by the extremely high standard of living during the relationship. Per H, the extent to which the court should reflect “downsizing” in W’s future housing provision within the quantum of her award.

(b)    The parties’ respective income needs.

(c)     The appropriate quantum and term of provision that W should receive to meet her future income needs.

9. Per W: interim maintenance:

(a)    Per W, whether H is correct to assert that he had severe cashflow constraints from October 2017?

(b)    Whether W ought to have received interim maintenance payments sufficient to cover the deficit between her expenditure at the marital rate post separation (and on legal fees as required) and the payments that she received from H?

(c)     W having not received those payments, whether H should now be responsible for meeting the charges and interest that W incurred in taking out loans to cover that deficit, and the discharge of those loans, before the division of the matrimonial asset base?

(d)    Per H, the reasonableness of W’s expenditure since the breakdown of the relationship.

(e)     Per H, whether it is otiose and contrary to the overriding objective to seek retrospective judicial determination of interim maintenance questions when (a) the court is engaged in performing the wider section 25 exercise and (b) those interim questions were resolved by consent, albeit without prejudice to later contentions.

10. Outcome:

(a)    W seeks a lump sum of £16,000,000 plus a transfer of one of the parties’ cars to her sole name and with H to cover her loans (including interest and costs: £741,340 plus interest since 13 September 2018). H offers to pay W a lump sum of £4,850,000 plus her reasonable outstanding costs but on the basis that W is responsible for her own litigation loans.

(b)    The appropriate division of chattels, including the parties’ dogs: B and C

The Parties Positions

The Law

“(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.”

“ 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-business-partnerships, 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 ?”

“ 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 .”

“ 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 .”

Latent Value

“ 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 ”     

“… 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 .”

“… 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 .”

i)                    The parties were living together in the same household, apart from a minor change brought about by the husband's warning in April 1999;

ii)                  The living together involved a sharing of daily tasks and duties;

iii)                There was stability and permanence in the relationship;

iv)                The financial affairs of the couple was indicative of their relationship;

v)                  Their sexual relationship was admitted and ongoing;

vi)                There was a close bond between L and the wife's child;

vii)              As regards the motives of the couple it was clear that the wife had denied cohabitation and acted as she had so as to continue to enjoy the payment of maintenance from her husband;

viii)            There was sufficient evidence that cohabitation existed in the opinion of a reasonable person with normal perceptions.

i)                    CO-v-CO [2004] EWHC 287 where Mr Justice Coleridge said that “ committed settled relationships which often endure for years in the context of cohabitation (often but not always with children) outside marriage must, I think, be regarded as every bit as valid as those where parties have made the same degree of commitment but recorded it publicly by civil registration, i.e. by marriage. ” He considered that it might fall to be considered as a non-financial factor/circumstance under section 25 as much as the duration of the marriage.

Adverse inferences

This Hearing and the Evidence

i)                    An agreed case summary, agreed chronology and an agreed list of issues.

ii)                  An agreed schedule of assets: which was not entirely agreed given that it identified various differences between the parties in their assessment of the assets.

iii)                A 20 page skeleton argument on behalf of the wife and a 20 page opening note on behalf of the husband. The husband’s team also produced a written closing note which I declined to read, save to the extent that Mr Marks expressly referred me to it during his closing submissions.

i)                    A colour-coded schedule of the wife’s contemporaneous evidence in relation to cohabitation;

ii)                  A balance sheet for the husband from 2009 and another from 2003;

iii)                Various photographs of the children during their minority;

iv)                A Civil Evidence Act Notice producing a letter from a neighbour, which addressed the issue of whether the wife had ever lived with the husband in The Principality;

v)                  A copy of the French original of the ‘Act de Mariage’ which referred to the wife as being the divorcee of PQ; relevant because the wife accepted that she was not divorced but rather the marriage was annulled and thus the information provided to the authorities in The Principality was inaccurate;

vi)                A schedule showing the sums the husband received from the sale of his first business between June 2000 and July 2001;

vii)              A schedule showing how the assets recorded on the June 2007 balance sheet were deployed during the relationship and how the funds were spent;

viii)             An analysis of the 2015 budget which extracted from it that part which the husband submitted was fairly referable to the wife’s income needs. That figure came out at £206,273;

ix)                A schedule comparing the wife’s future budgets from her Form E (£598,000 including a second home or £431,000 excluding a second home), the maintenance pending suit budget (£444,000 or £343,000 excluding child expenses), her current budget (£1.33 million which included £288,000 in respect of first and second home rentals) and the husband’s proposed budget for the wife (£199,744);

x)                  Duxbury Calculations based on the husband’s proposed income needs for the wife;

xi)                Extracts from the case management hearing before me in June 2018;

xii)              A schedule said to represent the wife’s expenditure from September 2017 to date, showing the husband’s payments to her and to WD, taking into account monies she has received from litigation loans she has taken (not all of which has been spent on litigation), maintenance received from the husband and sums paid by the husband to WD. This appears to show that the wife spent £250,000 on meeting her own expenses in the last year;

xiii)            Capitalised calculations produced on behalf of the wife showing the £8.3 million capital sum required to generate an income of £500,000 per annum from 51 to 60 and £250,000 per annum from 61 to 88; and

xiv)            The wife’s outcome calculations showing various options as to the approach to the valuation of the husband’s premarital assets and his interest in Zebra and how they might impact on the overall sharing of the assets. It also shows a simple needs calculation and how that is reflected in the percentages and sums each party would receive, together with what is called a ‘Hart’ percentages calculation.

The Wife

The Wife’s Witnesses

The Husband

Chronology and Some Factual Findings

1963                                        H born (55) in UK. Left in mid-20’s to work in US. Parents and brother remained living in England. He subsequently married his first wife.

1968                                        W born (50) in UK. Parents and other family remain living in UK. At some point the wife started work as a model. 

1994                                        H establishes his first business with ML and JB

1996                                        H ceases to be tax resident in the UK

1996                                        WD born (22). W’s daughter with a former partner who played an intermittent role in her life both in terms of his physical presence and in terms of financial support.

1998                                        HD born (20).  H’s daughter with his first wife.

2000                                        H sells his first business to a successor business; H receives £15.322m

2001                                        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

2001 – 2002                            H, ML, and two others found Zebra

2002                                        The precursor to ZCo is incorporated in the tax haven

2002                                        HS born (15). H’s son with his first wife.

2003                                        W ceases modelling career. H still resident in the tax haven.

Early 2003                               (per H) H and ML invest in Zebra to purchase customer base of another company with £500k put in by H. This was his initial capital input.

April 2002                               W marries PQ, knowing it to be bigamous.

2003/4                                     H separates from first wife.

                                                The husband described in his evidence the work that had to be undertaken to put Zebra in the position of beginning the process of applying for licences.  He described how in particular the software systems had to be created in various different areas which would enable the business to function. He described having to explore the options to procure what Zebra would supply. He described the business as akin to having to have a fully operational aircraft designed and built even if its first transaction was only to carry one customer. As a software engineer he was a leading figure in the development of the software which underpinned the business and which were pre-requisites for the application for licences. I accept that in a deregulated industry seeking to acquire licences from a regulator would require careful and extensive preparation and evidence of the ability to fulfil the commitments that would be undertaken by a new entrant to the market. A regulator would not grant a licence unless satisfied that the company was in a position to deliver to the customer what they were promising.

2004                                        H moves to live in The Alps to be closer to his children and Europe for setting up Zebra. Rents and then purchases an apartment Swiss CHF7-800k.

H settles the Lennon Trust in Singapore

June 2004                               The wife issues divorce proceedings from PQ. Although she told me that decree absolute had been granted by about June 2004 this was not true. Her suit was defended on the basis that the marriage was bigamous and should be annulled. In due course it appears that the marriage was indeed annulled - although this appears to have been much later in December 2006. W receives financial settlement of about £320,000. 

3 September 2004                   Letter of wishes re Lennon Trust: H settlor; H principal beneficiary during lifetime; thereafter: 60% to two children; 30% for wife [ie his first wife] if she survives me; first wife excluded in event of divorce; 10% to parents.  The letter of wishes states that the husband was happily married, which plainly was not true. I accept that this letter was no doubt in a standard form but it was not accurate and the husband acted upon it.

2005                                        The subsidiary later owned by Zebra is formed and applies for licences. An apparent discrepancy in the husband’s evidence was explained by the difference between commencing the preparations for applying for licences and the submission of the applications themselves. I accept that very careful preparation would be required and that this would be a lengthy process.

January 2006                          Zebra acquires the subsidiary

2006                                        Accreditation granted by the regulator to the trading subsidiary. Parties meet at a dinner party. Although I accept that the parties met and perhaps began dating occasionally, I do not accept that this could be characterised as a serious or committed relationship at this point. It was not until late in 2007 that the wife introduced the husband to her daughter or he introduced her to his children. Given that WD was living at home with the wife it seems hard to explain how the husband could not have met WD prior to autumn 2007 if he was, as the wife says, staying regularly at W’s London apartment. I conclude at this stage that the relationship was no more than casual but was developing.

Dec 2006                                 Decree of Nullity. W receives around £320k

2006                                        H puts £225k into Zebra as a loan

2007                                        Licences granted

2007                                        £520k as a loan but converted into equity by H to Zebra

June 2007                                Per W, Parties travel to Italy

                                                H’s balance sheet shows his net worth at €26.2 million/£17.6m [C209]

September 2007                      Per H, parties begin dating. I do not accept that the relationship commenced this late. The contents of the husband’s email to R of 29 October 2007 contained details of what the husband and wife had done by then and their activities are far too extensive for the relationship to have commenced only in September 2007. Nor do I believe that the husband would have introduced his children to the wife within weeks of the relationship commencing or that the wife would have introduced WD to the husband so early.

September 2007                      H stays at W’s London apartment and meets WD. The following weekend, the parties stay at H’s property in France. W meets HD and HS. This indicates that both parties by this stage felt that the relationship had moved beyond casual and was more serious in nature.

October 2007                          It is the wife’s case that at this point the husband moves into W’s apartment in Pimlico and parties begin cohabitation. H starts providing for WD as a child of the family. The husband says that prior to October he had stayed at a hotel when in London and had kept some close and other personal items there. He says that these items were now moved to the wife’s flat and that he began to stay with her at her property when he was in London.

                                                WD meets HD and HS when all 5 spend time in France.

                                                H emails his friend R 29.10.07 [2/C349]: “Well so far so very good…. Perhaps I was completely wrong. Not a moment of insincerity, not a glimpse of anything high maintenance…She has opened up her heart and her home, introduced me to her daughter whom I get on with like a house on fire and her friends…. Having said that I am still very wary, my guard is still up and I am being very careful should the big bad wolf appear...disguised or not.”

                                                It would be a huge leap from considering the relationship serious enough to introduce each other’s children and for him moving his few personal possessions in London into the wife’s London property to it being characterised as akin to marriage at this point. His previous relationship had endured for three years but not moved on to marriage. It is evident from his email that he was wary. He was of course still married to his first wife. His main home was in The Alps. I do not consider that the relationship at this stage can be considered to be equivalent to marriage. It is entirely possible that the parties had different perceptions and, given the wife’s tendency to rose tinted spectacles, she may have invested very high hopes in the relationship and viewed it as having reached a level of intensity akin to marriage. However, I do not accept that the husband viewed it as this when I do not accept that objectively it can be characterised in this way.

November 2007                      H’s car traded in against new car acquired for W’s use [C350]

Parties travel to Paris for the weekend with all three children, taking a 2 bedroom suite, and on to H’s business partner’s house in The Alps.

December 2007                       Per W: H purchases engagement ring for W in New York. Parties become unofficially engaged. The evidence as it emerged in court was clear that the wife was mistaken in giving this date. I’m not sure that it was a deliberate error as opposed to a reflection of the wife’s general unreliability as to dates combined with her instinctive presentation of matters in the most positive way.

H receives an offer for his property in The Alps.  H purchases (with 2 others) chalet nearby. W and H buy some furnishings. The family spend Christmas there with their children and W’s mother. H paid CHF 7-800k and had exclusive use.

H purchases land in The Alps for development and later builds a Chalet on this land. The wife’s case was that this purchase was by both of them and for both of them to build a family home. The husband says it was bought to provide a main residence for himself, not for the two of them. W was involved with the internal design, visiting on a couple of occasions while H designed it on ‘Sketch-Up.’ H pays CHF1.5m for large plot with dilapidated house.  Subsequently a new property was part built on the land. W’s evidence on this seems improbable – in the context of the e-mail H sent to R and the early days of their relationship it does not seem likely to me that the parties discussed purchasing this land at this time as a home for the two of them. That subsequently between 2007 and its sale in 2012 it came to be viewed retrospectively as a potential family home would be unsurprising. But I do not believe that is how either of them saw it at the time. If the wife did, it was a product of wishful thinking rather than objective reality.

January 2008                           Parties spend 10 days in the Maldives together. H’s nanny looks after WD in London. [C354]

E-mails suggest that H and W liaised with the nanny to make the arrangements. H did not make the arrangements without reference to W – they were not then so embedded that he was able to make decisions about the care of her child.

February 2008                         WD offered a place at a private school in London and begins in September. H is in London when letter received and sends it on to W [C444]

H emails W [2/C374]: “ I resolutely wish to spend the rest of my life with you and believe with all my heart that somehow together we will make that happen. I don’t have all the answers or in fact confess to even know all the questions that we face … ”

Viewed in isolation this might suggest that the relationship had moved on to something more approaching a quasi-marital one. However, the totality of the letter makes clear that the parties were still making progress in the relationship. The email refers to disagreements and underlying friction. It explores their attitude to each other’s friends and in particular addresses an issue to do with what would appear to be the wife’s suspicion that the husband’s relationship with R was more than just business/friendship. The contents of the email are more consistent with the relationship still edging forwards. In a new relationship one may well suppress one’s hopes to one’s partner and one’s fears to one’s friends. It does not necessarily mean the husband was insincere but rather is a reflection of conflicting emotions.

Easter 2008                             Parties stay at H’s property in The Alps with their children

W says she spent the ski season 2007/2008 from late 2007 until Easter 2008. Indeed she seemed to suggest that this was the situation every year. Her own evidence in her witness statement together with that of Miss U, the husband and common sense suggests that, given she had a daughter at primary and secondary school for the vast majority of this period, she was not in fact living in The Alps as she said, but rather spending the majority of time in London looking after WD whilst also managing to spend weekends and perhaps other short periods of time away from WD with the husband in The Alps. 

Spring 2008                             H begins renting property in France and, per W, spend time over the spring and summer there

May 2008                                 Per W, H, W and WD travel to the Caribbean

2008                                        H and W view various properties for sale in London and the countryside.  H commuting from London to Zebra’s offices in the Midlands. The property search continued throughout 2008 and 2009. H rents larger flat in London when all the family are together. A pattern began to be established over this period of time. The husband says that it was in 2007-2008 that he spent the most number of nights in England; around 80 or so, still well below the 90 maximum permissible. The husband was having alternate weekend contact with his children and on occasions they were travelling to London and spending the weekend with the husband, wife and WD. I think WD’s recollection of them spending regular periods in London and regular periods in the European country where HD and HS lived was accurate although whether that endured over the whole period is another matter. The husband continued to retain his main home in The Alps and travels to see HD and HS and to London to be with his children every other weekend. At times, all three children were transported to The Alps along with the wife in order to spend time together there. The husband described how all of his personal possessions remained at his home in The Alps until they were moved to France. Equally, the wife retained all of her personal possessions in London.

August 2008                           (per W) Whole family (H, W and 3 children) have holiday in Caribbean. C433 shows children together

                                                This must be 2010: photo shows HD’s 12 ^th birthday.

Summer 2008                          The husband’s property in France sold for €3.8m; H rents another property in France (later purchased) for €150,000 per 6 months. W involved in the arrangements. H and W involved in liaising with Landlord [C380] H’s children brought from the European country they lived in to London by nanny. [C363]. At some point in the process H e-mails W talking of ‘OUR House’ and sharing ownership. [C385] Date of e-mail is not clear. This seems to be further evidence of the progress of the relationship. Whether it had reached the stage where it could be characterised as equivalent to marriage I remain doubtful. Although the parties were and had been involved in a sexual relationship for between 18 months to 2 years, they were not and had never used (as I understand it) contraception. This approach to the possibility of having a child does not in my view necessarily indicate that the relationship had reached the quasi matrimonial stage. After all it appears that they were not concerned about the possibility of conception from very early on in the relationship before it could ever be characterised as quasi matrimonial. The language the husband used in emails was effusive and, having seen him talk about it, I conclude that his initial reservations about the sincerity of the wife’s feelings for him had diminished and his enchantment with her had overtaken him.

Autumn 2008                          Zebra launched (per company website) [2/C320]

October 2008                          Email from H to a friend [2/C375]: “I’m living in [London] at [ W’s ] place waiting for the market to settle down before getting back on the ladder”

17 October 2008                    H becomes (first) CEO of Zebra. H says he was part-time although involved significant time. He stayed in W’s apartment in London and her next apartment in Prime London and 1 or 2 nights in a hotel in the Midlands. W joined him occasionally in the Midlands.  H said he spent about 80 odd nights in the UK in 2008. He couldn’t have spent more than 20 weeks in England if he wasn’t to put his tax status at risk. It seems unlikely he was here for the time either W or WD suggest.

10 November 2008                 E-mail to WD’s Father – co-authored by H in which they refer to W having an extended family [C372]

Dec 2008                                H and W go to New York: C389. Purchase of rings. The wife described this process in some considerable detail and the subsequent purchase of the remainder of the jewel for a set of earrings for her. WD described the ring as an engagement ring.

2009                                       Zebra raises £4m equity from shareholders [C453] I was told that £1.9m was put in by H as a loan but was repaid in 2010. 

January 2009                           W enters tenancy in respect of an apartment in Prime London. H pays the rent and guarantees it. He did not wish to rent because of his tax status.

3 February 2009                      H granted options over Zebra shares at an exercise price of 30p per share. At some point in 2009 Zebra moved on from selling to businesses into the mass market. The deal with a bank to buy on the futures market was adjusted with the bank taking 10% of the equity in Zebra in return for a more favourable financial arrangement in respect of the futures. I think this in practice meant that Zebra did not have to deposit significant sums in cash with the bank in order to cover forward purchases.

18 February 2009                    [C378] Letter to H and W about renting the property in France

24 February 2009                    H emails W [2/C316]: “ My Darling [W] , Wife to Be … I love the way you embrace the children … and I could think of nothing greater than sharing another child with you…personally I can’t imagine my life without you. ”

                                                H said he was madly in love with W at this time.  H says this is a love letter. Although it doesn’t necessarily mean the position was by then equivalent to marriage, the indication of the desire for a child and the later fertility testing suggest that by now there was a level of commitment comparable with marriage.  The email also suggests that there was some cash flow or other problem with the husband’s finances at this point in time.

2009                                        WD’s father ceases all financial support for WD and H assumes full responsibility

H begins to build the chalet in The Alps on the plot of land purchased in 2007. The husband described how the project stuttered as a result of funding shortages. Ultimately it was never completed. W was very involved with this development. This would be consistent with the nature of the relationship between the parties by then having crossed the Rubicon and moved away from girlfriend/boyfriend to husband/wife.

Easter 2009                             Whole family travels to USA

Summer 2009                          Family holiday in French property. HD’s birthday celebrated all together there. [C433]

25 December 2009                  Handwritten letter from H to W [2/C348]: “Together now for our 3 ^rd Christmas”

Christmas/New Year 2009      Per W, Whole family travels to South Africa, with a housekeeper

2010                                        H puts £431,091 as a loan into Zebra (not returned)

2010                                        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.

                                                Zebra makes a profit for the first time.

c.2010                                     Chalet in The Alps is sold. H rents another chalet in The Alps (per W) as a family home.

October 2010                          Whole family travel to USA

Nov 2010                                Parties attend an annual ball

2011                                        H pays £18,975 to Zebra – not returned

2011                                        W enters tenancy in respect of another property in Prime London. H pays rent

Zebra’s profits increase

Easter 2011                             Whole family travel to USA

Summer 2011                         Short separation. W threatens to lawyer up and go to a newspaper. Demands H transfers £250,000 to her.  Resumption of relationship shortly thereafter. I do not believe that this short, albeit unpleasant, situation undermined the essentially ongoing nature of the quasi matrimonial relationship.

September 2011                      H’s divorce from his first wife.

6 January 2012                        Letter of wishes re: The Lennon Trust [2/C281]: H settlor; H principal beneficiary during lifetime; thereafter 55% to children; 25% for W ‘my future wife’ if she survives H; W excluded in event of divorce; 20% to H’s parents

(per W) Later manuscript amendments [1/C28] where H proposes that on his death 50% of the fund be for his children and 50% for W

This reflects the fact that the husband and wife viewed themselves as quasi-married. It is interesting although probably not significant that WD is not mentioned as a beneficiary in the way H’s children are although it might be she was covered by W.  The references to being happily married et cetera suggest only that a standard form of letter provided some years earlier was still being used. The husband’s evidence was that the assets which had been put into the Lennon Trust were being slowly withdrawn as the husband’s capital was eaten into as it was deployed to meet their generous living expenses.

2012                                        H ceases to act as CEO of Zebra

H sells partially complete chalet in The Alps (before building work is complete).  It sold for CHF6-7m and there were loans repaid. The husband said a significant sum realised. 

H forms SCI Lennon. SCI purchases the property in France the parties had previously rented. Cost was €3.85 million and some €3 million was spent on renovations.  The wife’s evidence as to her involvement in the renovation of the property powerfully confirmed the level of her input. Given her flair for all matters design and fashion orientated it is hardly a surprise that within the marriage she should have undertaken this sort of role. Whilst I doubt that she flew 3 to 4 times a week for any purpose or any combination of purposes, she undoubtedly was heavily involved in a quite hands-on way in aspects of the development of this home. It seems to have been a recurring feature of the relationship that the parties could not settle upon a single place to make their home. WD continued to be schooled in London but the husband continued to be tax resident outside the UK and so could not base himself there. The husband says that the wife continually promised to relocate either to The Alps or to France but never fulfilled her promise. His inability to understand her position perhaps reflects the difference between a father who has contact with his children and a mother who cares full time for hers. He of course had been able to relocate away from the European country to the Tax Haven and then to The Alps and had maintained his relationship with his children at a distance whilst their mother remained the primary carer. At C303 the wife gives her account and says that she wanted to remain based in London due to WD. This conflicted with her oral evidence that she had in effect made her home in The Alps and France. This was a construct to fit her narrative of the relationship being quasi matrimonial from 2007 onwards.

Easter 2012                             Discussions about moving to The Principality.

June 2012                                H rents first apartment in The Principality as a family home, being W’s proposed location for married life. Regular trips to Balearic Island and to French Riviera.

August 2012                           Parties become permanent residents in The Principality; discovery by H of messages between W and another man lead to wedding planned for September being called off. Whilst the parties may have become permanent residents of The Principality, this did not actually involve them living full-time there. The status of a resident is one thing; becoming resident another.  The issue of the marriage was clearly of some sensitivity. Whilst WD appears to have been fully in the loop, the husband’s children plainly were not. I can well understand given the sensitivities as to HD and HS’ mother’s alleged emotional vulnerability that the husband’s remarriage could have caused issues. What I have been unable to grasp is how it was kept from HD and HS given that WD herself knew. Ultimately nothing turns on it.

                                                This is the low point of the relationship it seems – but H continued to pay the rent and the physical relationship was maintained, they swiftly resumed the relationship because they went on holiday to Italy very swiftly. H’s evidence that they had separated until later in the year was not made out on exploration of the evidence as he accepted they very soon after went on holiday to Italy and resumed their relationship very swiftly. I prefer the wife’s account of this period. It was a ripple, perhaps a significant ripple but it did not break or alter the nature of the relationship that had been in place by this stage for some three years

January 2013                           Per H: W promises that she will henceforth be faithful to H and that she will move to live with him in The Principality, on the basis of which he agrees to marry in September Per W: H & W’s engagement continues; W and H continue living together in The Principality (and other countries); parties plan wedding in The Principality. I did not hear sufficient evidence on this to determine the point. It is clear that the issue of where they would make their home continued to be an issue. The email exchanges at the end of the relationship support the husband’s case that he was agitating for the wife to base herself in The Principality [C446].

2013                                        £57,800 (not returned) H into Zebra. I was told by Mr Cusworth QC and it was not challenged by Mr Marks QC that the total sum of £1,777,866 was invested by H into Zebra and not returned via loans.

2013                                        ZCo borrows CHF2.42m, later divided as a loan of CHF1.21m from H and CHF 1.21m from a third party.

25 February 2013                    Lennon Trust: request to wind up Lennon Trust and remit funds to H.

March 2013                             Refurbishment of French property ongoing [C428]; W involved

Easter 2013                             Whole family travel to USA

12 September 2013                 Parties marry, in The Principality

31 December 2013                 ZCo Balance Sheet [C210]

26 March 2014                        Lennon Trust dissolved [C192] Funds and investments remitted to CS/UBS as guarantee for French mortgage. Some since sold, some still held.

11 September 2014                 ZCo’s loan divided between H and a third party

24 January 2015                      Email from H to W [2/C317]: “I see you sprinkle your magic on HS and HD and I know you are the greatest of mothers, the most amazing wife”

                                                Reference to financial difficulties and to being on the first steps to being financially secure. By this time the husband appears to have almost run out of the capital which he had brought into the relationship and the marriage. The huge sums spent by the parties on their living expenses and on the renovation of the French property must have been a considerable drain. The reference to financial security was to the prospect of a sale of Zebra referred to below

2015                                        Possible sale of Zebra at £500m overall.

2015                                        Parties rent a new apartment in The Principality in joint names for 3 years. Parties undertake extensive structural and decorative work overseen by W costing some €500,000.

The letter from a neighbour in The Principality suggests that the wedding card that the neighbours sent in 2013 and which referred to the husband and wife as their neighbours was more in the way of a pleasantry rather than a genuine reflection of the wife appearing to live in The Principality. The neighbour says she was of the impression that the wife generally lived in London caring for WD. Ultimately, I do not consider I need to resolve the issue of whether the wife was living in The Principality or not. The wife maintains that she had essentially relocated to The Principality after the marriage. Again this seems unlikely given that WD was still at school studying for her A-levels. But ultimately by this time the parties were married and had chosen to arrange their lives as they had. That there may have been a disagreement as to whether the wife had fulfilled an alleged promise to locate more fully to The Principality is neither here nor there.

3 February 2015                      The husband receives via ZCo £6,069,416 (£14.16 per share) from sale of Zebra shares [2/C274-276]

29 April 2015                         H lends a business associate £1 million

15 May 2015                           H awarded Zebra options at exercise price of £1.57 per share

May 2015                                WD leaves school. Does Foundation course.

30 June 2015                         The husband receives £954,353 from Zebra share sale (£17 per share).

July 2015                                 H acquires Manx company that buys a yacht for €900,000

Budget document C337

Must be after the purchase of the boat in 2015 as it refers to it.

The reference to difficult financial times suggest they had used up much of the husband’s capital. He must have initiated a conversation about adopting some restraint in their financial expenditure. Otherwise the wife’s handwritten notes on the budget as to ways of saving money would not make any sense.  The husband says that W wouldn’t economise by giving up on London and moving to The Principality as H wanted.

23 September 2015                 Business press article [2/C321] states Zebra’s customers increased by 100% in consecutive years

3 March 2016                          ML agrees to repay 1,300,000 CHF to H (repaid from December 2017 and final payment made 22 March 2018)

2016                                        Parties discuss HS coming to live in The Principality: W resists on the basis that she considers it would be better for him to be schooled perhaps in London

Sept 2016                                WD starts fine art course in NY

February 2017                      Per H: Date of separation

March 2017                           W pawns some jewellery 

Easter 2017                             H, W and 2 children to Morocco

April 2017                               H consults lawyer in The Principality to advise upon divorce.

May 2017                                W asks H to pay a bill for Messrs Farrer & Co

                                                Incident in The Principality where W damages bedroom door. Parties had sex the next morning.

June 2017                                H starts new relationship.

July 2017                                  H cancels W’s Amex Black card, having warned her repeatedly about over-spending. This seems more likely to be linked to the husband’s view that the marriage was now over rather than necessarily a concern about overspending although that may have played a part.

August 2017                           Parties attend a meeting at Farrer & Co

September 2017                     Per W: Date of separation

H appointed CEO of Zebra and becomes closely involved with business in context of discussions with the ultimate purchaser

[C446] E-mail: ‘ you promised me to give up [Prime London] and move to The Principality. Hasn’t happened .

12 October 2017                     [2/E1] AFP write stating that H’s capital “has all but run out” and states that H will now provide W with an allowance of £6,500 per month “from which she must budget (on top of her rental which he has covered up until the end of this year).”

                                                W in New York. E-mails [C220] are unpleasant to read and the wife accepted that they did not reflect well on her. Clearly this was a very difficult time.

1 December 2017                    [2/E4] AFP state sale of Zebra hangs in the balance and delayed to end June 2018, but matters will improve dramatically if the position changes as a result of a share sale. For the time being, H implores W again to curb her spending, requires W to break London tenancy and offers 2 more months’ rent; proposes that W move to The Principality property and H stay in France 

December 2017                      W sets up website and online shop promoting luxury brands

31 December 2017                  ZCo Accounts – C179/C284

4 January 2018                        AFP serve copy of draft Sale and Purchase Agreement on W

-           H’s share of total consideration (17.5%) £33,162,500

-           Slaughter & May advise total consideration likely to be higher (H to receive c.£40 million)

February 2018                         Completion of sale of Zebra.  

23 May 2018                           Potential gross receipts of £36,685,146 from Zebra with £6,323,612 retained. £3,161,806 due 2018; £1,580,903 due 2019; £1,580,903 due 2020       

Financial Information

The agreed schedule of assets shows a bottom line on the wife’s case of £38,946,372. On the husband’s case the bottom line total assets is £38,274,048.  The net assets figures include deductions for the repayment of the two litigation loans taken by the wife in the sums of £366,800 and £374,540 and her unpaid legal costs.  The schedule also includes a figure for the husband’s unpaid costs. Both parties have included the sums retained in relation to the Zebra shares in the sum of £3,964,378. The proceeds of the Zebra share sale are currently represented by bank accounts in the husband’s name totalling £4,898,663 and sums held in ZCo (the husband’s company structure) in the sums of £5,296,687, £5,800,000, and £16,447,810 (held by Forsters to the court order) as well as the retentions of £3,964,378.

i)                    A gift by the husband to his brother of £100,054 on 8 August 2018.

ii)                  The gift by the husband of a classic car to his father, valued at £50,000.

iii)                An alleged debt owed by ZCo of £522,270.

Although significant sums by most people’s standards, they are modest in the overall picture of this family’s finances.

i)                    €17,100 per calendar month London rental

ii)                  €14,000 per calendar month The Principality rental

iii)                €7500 per month France mortgage

iv)                €12,000 per month boat lease payment

v)                  Allowances, W €6750, H €5000

vi)                Staff in The Principality €8100 per calendar month. Other staff across the properties total €10,000 per calendar month.

vii)              Flights €2000 per calendar month

viii)            Holidays €100,000 per annum

ix)                Amex €30,000 per calendar month.

i)                    End 2002: £2.34 million

ii)                  End 2007: £14.04 million

iii)                End 2009: £18.72 million

iv)                End 2013:  £25.74 million

My figures are different to those outlined at paragraph 54.1 of Mr Marks QC and Ms Singer’s valuation but not I think significantly so (well not in the context of the sorts of figures we are talking about)

Conclusions on the Issues Identified

1. 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).

The nature of the relationship between the parties is hard to fit into any recognised category. The authorities tend to refer to the parties’ cohabitation and the seamless transition from cohabitation to married life. In this case at the commencement of the relationship the wife lived in London, had done for many years and continued to do so her main home being here to this day. In contrast the husband left the UK in the late 1980s and has had his main home overseas ever since. At the commencement of the relationship his main home was in The Alps although he also owned properties in France, the Tax Haven and in Asia.  In October 2007 the husband began to stay at the wife’s London property on a regular basis for somewhere in the region of 60-80 nights per year. The wife at the same time began to spend significant periods of time, in particular during school holidays, but also for periods during term time at the husband’s home in The Alps. As time moved on a piece of land was acquired in The Alps which, whatever its origins, came to represent an intended family home. From the summer of 2008 the husband and wife rented a property in France and this became in due course the husband’s main home and the family’s main base for the summer. In June 2012 a home was rented in The Principality it being intended to be the main base of both the husband and wife albeit never really became that. From late 2007 when the husband was in London not only was he staying with the wife but also with WD and he took on the role of stepfather to her and took on financial responsibility for her school fees and general maintenance. As I have identified in the chronology, the relationship continued to develop over the course of 2008 and the beginning of 2009 by which time I consider it had crossed the Rubicon and was in the territory of a quasi-marital relationship. That continued to develop until by the time the parties were exploring fertility investigation in early 2010 it was firmly established.

Even if one could not identify a cut-off date, it is clear that the premarital relationship was, notwithstanding some ups and downs, a committed relationship which was moving towards marriage, in which children were contemplated and hoped for and in which the pattern of life which developed from 2008 onwards continued largely without change after the marriage took place in 2013. The initial phases where the husband was captivated by the wife developed into a more robust and mutually committed relationship. The fact is, though, that this was a committed and exclusive relationship which endured for some six years before being sealed by marriage. The hiccups that the relationship experienced and which are clearly evidenced by the email exchanges, the text messages in 2011 and the calling off of the wedding in September 2012 do not represent a serious fracture. The husband’s case that there had been a separation of some months from August 2012 to late 2012 are not borne out by the evidence that within days they went on holiday together to Italy and throughout the autumn were spending significant periods of time together; to all intents and purposes back as a happy couple

2. 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.

It is clear that the relationship was in breakdown from late 2016 albeit the parties continued to spend time together. The husband accepts that he started another relationship by at the latest June 2017 and the majority of the summer 2017 was spent apart. In his mind he probably had separated emotionally by February 2017. The physical separation, given they spent time living separately in London and France anyway may be harder to identify. In the wife’s mind she certainly hadn’t separated emotionally or physically until September 2017

3. 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).

On the basis of the evidence as to the relationship between the husband and WD, her place in the relationship and marriage of the husband and wife and his having taken on financial responsibility for her seems to me she was properly to be treated as a child of the marriage. In respect of the husband’s children HD and HS I do not consider that they could properly be treated as children of the family. They lived for the majority of the relationship and marriage with their mother in the European country. They spent alternate weekends with the husband, the wife and WD. They spent, it would seem, large parts of school holidays with the family. During those periods the wife helped to care for them but the husband maintained sole financial responsibility for them and they never lived in either the legal or in any commonly understood way with the husband, wife and WD.

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

Over the 10 years from 2007 to 2017 a total sum of approximately £18 million was spent by the husband. A part of this went to support his ex-wife and family in the European country but by far the lion’s share, probably in excess of £17 million was spent on properties (including rental & renovations) several luxury cars, a yacht, holidays, entertainment, jewellery and all of the finest that money can buy. Whilst not quite the standard of living of the super-rich it was a very high standard of living indeed. As WD described it was a very different way of life to that which she had experienced before 2007.

5. Available resources.

(f)     Whether H (including via ZCo) has received full payment in respect of his Zebra options (including whether there are any retention payments).

It is clear there are some retention payments. I did not hear any evidence about any impediment to them in due course being paid although I note from Mr Marks QC’s opening note an issue about a regulatory investigation having the potential to impact upon them.

(g)    Whether H’s gift of c.£100,000 to his brother in August 2018 should (per W) be included as H’s asset for the purposes of these proceedings or (per H) be excluded from the asset schedule.

Although in most cases a sum of this sort would probably fall to be added back in, the sums the parties have spent in the last year amount to several hundred thousand pounds each and in the context of the lifestyle of each a sum of the hundred thousand pounds seems to me to be encompassed within the sort of expenditure that the husband might legitimately be able to make.

(h)    Whether H’s gift of a classic car worth £50,000 to his father should (per W) be included as H’s asset for the purposes of these proceedings as conceded by H in replies to questionnaire or (per H) be excluded from the asset schedule.

The car in question was owned by the husband before the marriage, indeed before the relationship and so should be excluded from the assets

(i)      Whether (per H) ZCO owes £522,270 in respect of a gain on shares.

Whilst the husband’s evidence was unsatisfactory in various respects for the reasons which I have outlined above, his explanation of a loan to the husband in return for its repayment and the profits on the share options purchased with the loan appeared to me to be genuine. Although it came in late this was supported by the email and accompanying documents.  If the husband says that that sum is owing I accept that.

(j)      Whether (per W) the prospect of H paying UK CGT on disposal of his Zebra shares is too remote and therefore should be ignored or (per H) the possibility of H paying CGT means that this potential liability should be deducted on the asset schedule.

The evidence from the single joint expert is that if the parties separated in the tax year 2016/17 the husband would not be resident in the UK for tax purposes in that year and therefore any potential CGT liability does not arise. On the other hand if the husband and wife separated in the tax year 20 17/18 he might be treated as a UK resident in which case a CGT liability might arise. However the SJE assesses the possibility as only being 20%. Given that the husband is the individual who will file the tax return and will state the date of separation as being within the 2016/17 tax year it seems to me that on the balance of probabilities it is most unlikely indeed that CGT will be payable in the UK.

6. Contributions:

1. The parties’ respective contributions during the premarital relationship from late 2007 to September 2013.

During the pre-marital relationship both parties made contributions to the ordinary functioning of the relationship. The husband worked in Zebra at least up until 2012 when he stood down as CEO. The husband and wife operated together to make arrangements for the care of WD, to deal with HD and HS, to deal with property rentals and renovations and all the other myriad tasks involved in living an international relationship of the sort they had.

Quite separately from the husband’s work, he financially supported the family from assets which he brought into the relationship. Although it is difficult to be precise, the total of the assets which he appears to have deployed between about 2007 and 2017, excluding the £7 million raised from the sale of Zebra shares in 2015, was about £11 million.  

2. The extent of H’s pre-marital wealth.

It is known, and I think not contentious, that in 2001-2 the husband received £15,322,000 from the sale of his first business. At one point his shares were worth nearly £100 million but, due to the stock market crash, the value declined to £15.322 million. The balance sheet produced by the husband’s accountant for the 31 ^st of June 2007 has been much contested but as explained above I consider it to be in general terms reliable. That shows net assets of about £17.64 million, which includes about £5.2 million for Zebra which gives £12.4 million of assets excluding Zebra. Allowing for the capital which the husband is likely to have expended between 2002 and 2007 that £12.4 million in all likelihood represents the remainder of the £15.322 million received from the sale of the first business.

3. The weight to be attached to H’s contribution of pre-marital wealth.

See later

7. Sharing:

(f)     Whether (per W) W is entitled to share in the growth in value in Zebra during the relationship, or (per H) W’s claims are to be assessed by reference to her reasonable needs.

The husband brought Zebra into the relationship at a time when the idea had been in existence for some five years and when the process of developing the idea into a viable business was well underway. The software which lay at the heart of the business, the work on securing supplies through a futures deal, the preparation for the application for licences, acquisition of databases and development of business plans was already very far established by 2007.

However thereafter in the course of the relationship the husband’s contribution to the relationship and subsequently to the marriage was in part his work in developing Zebra. The wife, whilst not playing an active role in the business, was playing her own role within the relationship. I have little doubt that the husband’s ability to develop the business was aided by his contentment in his relationship and the emotional and practical support that the wife gave him. Although he is now unable to exercise any real objective perspective on how she contributed to the relationship, it is clear that she did. Not to recognise this and to seek to ring fence Zebra would be to discriminate against the wife in respect of her contributions during the course of the relationship and subsequently marriage. The husband’s efforts in the period 2007 to 2017 are now reflected in part in the monies which accrued from the Zebra share sales.

It follows that the wife is entitled to share in the growth of Zebra over the period of the marriage and the pre-marital relationship from around 2009. As I have determined earlier in this judgment I assess the husband’s non-marital portion of Zebra at 40% and the husband and wife’s marital asset within Zebra at 60%

(g)    Whether sums that H brought into the relationship, but which were spent on living expenses during the relationship and no longer exist are (per W) mingled and spent, therefore not capable of being “ringfenced”; or (per H) a relevant and unmatched ‘contribution to the welfare of the family’ impacting on the fairness of sharing what now remains.

The husband’s deployment of all of his pre-2007 capital to meet the family’s expenses between 2007 and 2015 does amount to a very significant contribution to the welfare of the family. It was unmatched by the wife. To the extent that she had any pre-relationship assets, she frankly accepted she spent them on herself on items of art and jewellery which she retains. Whilst she is right that those very significant sums have been spent and cannot be ringfenced, that does not mean that they should be ignored entirely. It would be unfair to ignore the unmatched financial contributions of the husband in bringing in excess of £10 million of capital into the marriage and deploying it for the benefit of the family. It is probably theoretically possible to calculate roughly how much of the £12.4 million can be attributed to the husband’s family in the European country, to his own needs, to those of the family, to Zebra, but I do not consider that to be a useful exercise. The deployment of those funds is clearly a very significant contribution which must be taken into account in the overall discretionary exercise. The figures produced by Mr Marks QC and Ms Singer show that £11.35 million of the 2007 assets were spent. I do not consider it appropriate simply to add them back in any arithmetical way. The husband chose to deploy them and has benefited from them as have his children, the wife and WD. The family are fortunate that his divorce settlement to his first wife did not require him to pay her 50% of the assets. I consider that that contribution warrants an adjustment to the sharing of the matrimonial assets in the husband’s favour. In broad terms a 60/40 split of the matrimonial assets would in my view reflect this very significant additional contribution that the husband has made. That at first blush would put the wife’s share of the Zebra matrimonial assets at £9 million and the husband’s at £13.5 million.  Of the remaining assets amounting to some £775,000 there is no reason why they should not be split in the same proportions. It is almost impossible to identify where their origins lie but given the parties received some £7 million from the sale of Zebra shares in 2015 some part may be referenced to them in some part may be referenced to other matters, including ages old assets brought by the husband into the marriage or the proceeds of sale of the property in The Alps. That division results in the quantification of the wife’s share of the marital assets adjusted to reflect the husband’s additional financial contribution at £9.31million.

(h)    The extent to which the value of H’s shareholding in Zebra derived from contributions that he made before the date of the marriage/relationship and the extent to which the value derived from contributions made after the date of the marriage/relationship. Per H, (a) whether it is desirable or possible reliably to assess when Zebra’s major value was built up or when H’s contributions were principally made and (b) if it is, the utility of those inquiries in the circumstances of this case.

This is perhaps the most contentious issue. However I have no doubt that Zebra had a very significant value prior to 2007. The current value of that 2007 value is a contribution which is solely attributable to him; the difficulty is in assessing the value in 2007 and how that sounds in the 2018 share sale proceeds. The Zebra business has not become mingled in the general matrimonial assets. However the matrimonial contributions (of the husband and in which the wife is entitled to share) have become mingled with the non-matrimonial contributions of the husband relating to the pre-2007 value and the passive growth of that value.  

(i)      The value of H’s interest in Zebra before the parties began to live together/were married. Per W: H has failed to provide any reliable evidence about this. Per H: probably only broadly relevant to outcome and not capable of being established definitively. Per W, in the absence of such evidence, the court should take a broad view on the best available evidence; bearing in mind that if there were any evidence available to suggest that H’s contribution was greater than the £2.2m which he has claimed for tax purposes, no doubt he would have produced it.

Although the wife is right in her assertion that the husband has not provided reliable evidence about the value of the husband’s interest in Zebra prior to 2009, even had he done so I’m not sure that I would have been in any better position to carry out the exercise of valuing it given the difficulties in valuing private companies. As I foresaw at the case management hearing in June, it was likely that I would find it more apt to deploy a broad brush approach which is what I have eventually concluded is appropriate having explored some of the other possibilities which could be used to value the husband’s non-matrimonial interest in Zebra. I have to the extent that I consider it fair adopted figures which probably operate to the detriment of the husband in valuation terms and which operate favourably to the wife.

(j)      How H’s contributions before the start of the marital relationship to the development of Zebra can or should be reflected in the final outcome?

As I have already identified, the husband’s contributions to the development of Zebra are assessed at 40% of its current value.

8. Needs:

(d)    The parties’ respective housing and other capital needs. Per W, these should be informed by the extremely high standard of living during the relationship. Per H, the extent to which the court should reflect “downsizing” in W’s future housing provision within the quantum of her award.

The wife clearly has a need for a 2/3bedroom property in the Prime London area. It is not unreasonable for her to seek such a property given she has lived in that area for a very significant period of time. In particular, the parties chose to base themselves in Prime London when in London and that is where the wife’s roots now are. The husband’s property particulars for that area provide a range between £3.5 - £4.1 million. The wife’s properties range from £5 - £6.485 million. She has clearly chosen properties which are broadly comparable to her current home, the husband has chosen properties which, whilst beyond most people’s dreams, are significantly lower in standard than the current property. I conclude that a property somewhere between the wife’s bottom end and the husband’s top end would provide the wife with suitable accommodation in the Prime London area. Including purchase costs, that would require a sum of in the region of £4.5 million. I do not consider it appropriate for the wife to be required to downsize at some point later in her life. If anything she will be more embedded in Belgravia and may as she grows older have more need for care and for live-in staff. Once she finds a property she should be able to remain there for as long as she chooses although she might relocate in order to release capital. The husband’s housing needs are met by France.

(e)     The parties’ respective income needs.

The wife’s assessment of her income needs included a second home which is no longer pursued. However, her needs are still quantified at £500,000 a year for the next 10 years. Having considered the 2015 budget which illustrated expenditure of €1.86 million per annum or £1.34 million per year including £436,000 of payments for property and the boat it seems that more appropriately the family’s total expenditure at the height of their expenditure could fairly be assessed at £800,000 per annum excluding properties. That budget included further extensive payments (in the region of £156,000 per annum) for staff which will not form part of the wife’s budget save in respect of £24,000 per annum for a housekeeper. As I explored above, I consider that the Husband’s calculation of the wife’s share of the 2015 budget was unrealistic. I conclude that a sum of £300,000 per annum more accurately reflects the sort of expenditure that was attributable to the wife to generate the standard of living that she has experienced since about 2007. The duration of the marriage including relevant pre-marital cohabitation or quasi matrimonial relationship is about eight years; so not a short marriage but not a long marriage. I consider it reasonable for the wife to continue to live at that general standard of living for an equivalent period and so for the next 9 years I consider that her income needs are £300,000 per annum. Given that this is not a long marriage with children I consider it reasonable to look at how long periodical payments should be made for and whether the wife would be able to adjust without undue hardship to the termination of her financial dependence on the husband. The reality is that the wife’s ability to secure any income is negligible, particularly by reference to her needs judged against the standard of living enjoyed by the wife before the breakdown of the marriage. Hardship, and undue hardship are relative terms which I consider I should assess by reference to the standard of living enjoyed by the family during the marriage. The termination of any periodical payments would undoubtedly create objective and subjective undue hardship. However, I do consider that given the duration of the marriage and by reference to the wife’s life prior to the marriage that it is not reasonable to expect the husband to continue to maintain her for life at anything approaching the level that she enjoyed during the currency of the marriage and will continue to enjoy for a further nine years. I consider that she could adjust without undue hardship to a significant reduction in the periodical payments. I consider it to be fair for the husband to maintain her after the age of 60 at a rate of £100,000 per annum only. That sum will still enable her to lead a good, if modest in comparison, standard of living in Belgravia. It will still provide sufficient to hire staff, to meet her other general outgoings at a reasonable level and to enjoy holidays. If the wife wishes to seek to maintain a much higher standard of living she would have the option of downsizing in Prime London and freeing further capital.  I thus consider that her income needs after 60 should be set at £100,000 per annum as suggested by the husband. This takes into account in addition a need for the wife to adjust away from the hugely lavish lifestyle that she has led as a result of the combination of the huge financial contribution that the husband brought into the marriage.  By my calculations this would require a capital sum of £4.44 million. The husband’s income needs exceed the wife’s given he remains responsible for maintaining his first wife and his children. He also has other expenses in relation to France and the boat. However, all his needs are easily met by his non-marital share in Zebra and his share of the marital acquest. Whether the husband still has it in him to establish a further business and to make a third fortune is a matter of pure speculation. He certainly retains an earning capacity of sorts; whether it is at fortune levels as an entrepreneur or whether simply at the very significant levels that may be achievable through deploying his experience as a consultant or director I cannot determine. Given his track record to date it would be no surprise if he were to establish another very successful business.

(f)     The appropriate quantum and term of provision that W should receive to meet her future income needs.

Both parties have approached the case on the basis of a maintenance need for the remainder of her life and I consider that it is inevitable that in the circumstances of this case and with the almost non-existent capacity of the wife to generate an income that this is the correct approach. This relationship endured from the wife’s being 39 through her to her being 50 years of age. She has almost no earning capacity. Having led the life she has over the last 11 years it is unreasonable to expect her now to return to the life of uncertainty that she led prior to embarking on a relationship with the husband and subsequently the marriage.

The total lump sum that would be payable based on an assessment of needs would therefore be £4.5 million (housing) and £4.44 million (income) giving a total of £8.94 million.  That sum is slightly below the award calculated on a sharing basis of £9.31 million and accepting that the authorities make clear that the award must be the greater of the sharing award needs-based award, I conclude that the quantification of the appropriate award in this case is £9.31 million.

£9.31 million represents some 24.32% of the net assets of £38,274,048. I am satisfied that that is a fair proportion of the total assets in this case having regard to the non-marital assets of the husband and the adjustment to reflect the husband’s additional unmatched financial contribution. It seems to me that it would be unfair for the award to exceed this. It leaves the husband with £28,964,048. I’m satisfied that that differential is a fair differential having regard to all of the section 25 factors and the particular features that I have identified as being of central importance in this case. Although I note that none of Mr Cusworth QC and Mr Brooks’ outcome calculations fall lower than 33%, I don’t consider that there is a bottom line cut off of the sort that was discussed at the close of submissions arising from Charman (No 4). If I am in dangerous territory so be it. I am satisfied that the process that I have undertaken to value the non-marital and marital assets and the adjustment I have made to reflect the very significant capital that the husband brought into the marriage and spent on the parties’ living expenses represent a fair outcome on a “broad horizons” basis.

9. Per W: interim maintenance:

(f)     Per W, whether H is correct to assert that he had severe cashflow constraints from October 2017?

I do not consider that I need to determine this as a separate issue.

(g)    Whether W ought to have received interim maintenance payments sufficient to cover the deficit between her expenditure at the marital rate post-separation (and on legal fees as required) and the payments that she received from H?

I consider that the wife ought to have received interim maintenance at a level consistent with the parties’ previous joint expenditure.

(h)    W having not received those payments, whether H should now be responsible for meeting the charges and interest that W incurred in taking out loans to cover that deficit, and the discharge of those loans, before the division of the matrimonial asset base?

The full value of the loans plus interest and charges has been deducted from the total assets in order to reach the net asset value of £38,274,048. The calculations above are therefore on the basis that those loans are discharged.

(i)      Per H, the reasonableness of W’s expenditure since the breakdown of the relationship.

The levels of expenditure that the wife maintained following separation were not dissimilar to those which were made by the parties jointly in the marriage. They were therefore reasonable.

(j)      Per H, whether it is otiose and contrary to the overriding objective to seek retrospective judicial determination of interim maintenance questions when (a) the court is engaged in performing the wider section 25 exercise and (b) those interim questions were resolved by consent, albeit without prejudice to later contentions.

I agree with the husband for the reasons which will be apparent from the preceding subparagraphs.

10. Outcome:

(c)     W seeks a lump sum of £16,000,000 plus a transfer of one of the parties’ cars to her sole name and with H to cover her loans (including interest and costs: £741,340 plus interest since 13 September 2018). H offers to pay W a lump sum of £4,850,000 plus her reasonable outstanding costs but on the basis that W is responsible for her own litigation loans.

The husband should make a lump sum payment to the wife of £9.31 million. Her outstanding costs are also a deduction from the assets which is reflected in the net asset figure and so they will be paid in addition to the £9.31 million that the wife will receive. I consider that the husband should bear the risk in relation to any of the Zebra retentions. I reach this conclusion partly because I consider it is fair for the husband to take the risk he having made his own risk decisions in relation to the evidence he provided to the court but also because if there are any retentions it is likely to be as a result of matters internal to the company which the husband and the board would be responsible for.

(d)    The appropriate division of chattels, including the parties’ dogs: B and C

I have heard almost nothing on this issue although I believe that one dog is currently in France and one dog is in England. That seems to me to be fair. If the parties wish to argue over their access to the other dog I would suggest that they place the dispute before a mediator or arbitrator; perhaps one with experience of dogs.

Conclusion

Procedural chronology

28 November 2017                 W’s petition issued (s1(2)(b))

30 November 2017                 W’s Form A

21 December 2017                  F&Co requests interim maintenance beyond £6.5k pcm + £15k as promised towards legal fees, in default of which MPS & LSPO app will be issued by 31.12.17

January 2018                          Farrer receive £15,000 from H

10 January 2018                      W sends a text to H:

                                                “[to the CEO of the ultimate purchaser]

Dear AM I hope this finds you well.

Let me introduce myself…I’m the wife of [H] of Zebra”

11 January 2018                      W proposes undertaking not to take steps to disrupt sale of Zebra. AFP reject undertaking

12 January 2018                      F&Co send AFP W’s draft undertaking. H applies for non-mol w/o notice

Order DJ Hudd [1/B1]

                                                Interim non-molestation order made in form of a gagging order; return date 26.01.18; costs reserved

26 January 2018                     Order of HHJ Harris [1/B4] – Return date

Consent order with the parties providing mutual undertakings not to contact one another other than through solicitors and not to publish information about relationship; W agrees and undertakes not to publish allegations about H mistreating her or daughter or information about financial affairs; order of DJ Hudd discharged; no order as to costs

W applies for an asset preservation order; H served with application notice. W’s affidavit in support of application for asset preservation order

Order of Williams J [1/B10]

Order made wp to H’s contention that application unnecessary and wp to his case that there is no evidence of intended dissipation of funds; H and ZCO undertake not to dispose of, deal with, or diminish value of holding in Zebra except for taking all reasonable steps to sell shares in accordance with SPA; H and ZCO undertake to transfer 50% of proceeds of sale from Zebra to Forsters LLP (Solicitors for ZCO) client account; Forsters LLP undertake to hold sum pending resolution of W’s financial remedy application; application listed on notice on 26.02.18; ZCO joined to proceedings for purposes of injunction only; costs reserved.

30 January 2018                      W’s Form E signed [1/C1]

1 February 2018                       H’s Form E signed [1/C47]

5 February 2018                       H makes ex parte application for zonal nmo.

Order of DJ Ashworth [1/B13]

FLA s42A exclusion zone order in respect of The Principality property; return date 15.02.18; costs reserved

7 February 2018                      W application to set aside order of DJ Ashworth made on 05.02.18

8 February 2018                      Order of Keehan J [1/B17]

Order of DJ Ashworth discharged (save for return date); H to pay costs of W application dated 7 February 2018

15 February 2018          Order of HHJ Harris [1/B21]

Consent order directing: parties will attend private FDR; W will return to H all original documents belonging to H presently held by W or W’s solicitors; questionnaires; replies; each party to file 3-page documents outlining relevant s.25 factors; mechanism to agree value France property (by reference to market appraisals); updating disclosure; listing of CMC and Final Hearing; costs in the application.

Order of HHJ Boye [1/B24] – return date on H’s application for zonal NMO dated 05.02.18

Consent order: W agrees not to attend The Principality property or France property, other than on reasonable notice; parties to file written evidence; list for one day hearing; costs reserved (save H to pay W’s costs of FLA application incurred between 9 -13 February 2018).

19 February 2018                    Order of Newton J [1/B33] – return date on W’s application for an asset preservation order

                                                Consent order: mirroring undertakings given to Williams J; hearing on 26.02.18 vacated; costs reserved

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

                                                DJ Cove makes an order for abridged service

22 February 2018          Order of DJ Duddridge [1/B26]

W not to attend The Principality property without first giving 14 days’ notice to H; application dated 21.02.18 adjourned to 18.05.18; costs reserved

2 March 2018                          W’s statement in support of application for maintenance pending suit [1/C93]

5 March 2018                          W applies for maintenance pending suit and legal services payment order. Seeks £39,220 per month backdated to November 2017 (plus rent of £128k pa and property outgoings)

                                                Farrers send to AFP “the originals of all documents belonging jointly to [W] and [H] that we hold in our possession”

8 March 2018                          Farrer receive £155,807 from ZCo/Forsters

1 April 2018                            W replies to questionnaire [1/C136]

13 April 2018                          H replies to questionnaire [1/C149]

16 April 2018                          Consent Order [1/B43]: seeking adjournment of hearing of H’s non-molestation order applications; costs reserved

30 April 2018                          H applies for an order seeking delivery of laptop and destruction of material obtained from it

Mar-May 2018                        Farrer receive £320,000 from Legal Cost Finance

2 May 2018                             Order of Moor J [1/B44]

                                                W offering assurances, accepted by the court, that neither she nor her solicitors will access laptop or documents in sealed envelope, nor will they disclose any contents to any third party; applications dismissed; time to exchange 3-page s.25 documents extended; W required to deliver laptop to her solicitors; no further disclosure without permission (save H’s reply to deficiencies and disclosure arising from envelope); H shall pay W’s costs of the application.

3 May 2018                             H’s s.25 document [1/C200]

W’s s.25 document [1/C194]

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

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

24 May 2018                           Private FDR Appointment before Nigel Dyer QC

18 June 2018                           Order of Williams J [1/B53] re MPS

Upon H confirming he will pay W £10k pcm backdated to 01.03.18 (wp to W’s position that this does not meet her needs) and continue to pay W’s rent and transfer £138,333 to W’s solicitors for her legal costs up to the end of the FDR; and upon W having obtain a loan to pay balance of her interim income needs (on her case) and legal fees up to 16.10.18

Consent order: application adjourned to first day of final hearing on 08.10.18; no order as to costs.

20 June 2018                          Farrer receive £138,333 from ZCo/Forsters

27 June 2018                           W’s Further Questionnaire [2/C285]

29 June 2018                           Order of Williams J [1/B55] - Case Management Conference

                                                H not seeking a finding in relation to application of The Principality’s marital property regime

                                                Order: parties to file narrative s.25 statements; serve witness statements, with hearsay notices if applicable (W permission to rely on evidence from 3 named witnesses, H permission to rely on factual evidence from Mr N); SJE to be instructed to value France; SJE to be instructed to report on H’s potential tax liabilities on disposal of shares; H’s application to rely on Knight Frank report dismissed; W’s application for SJE report on value of Zebra shares as at 01.09.17 dismissed; service of updating disclosure; trial directions; costs in the application.

27 July 2018                            SJE tax report [2/D1]

                                                Summary of conclusions: H should not be considered to be UK tax resident in 2017/18 and will not have an exposure to UK CGT on the disposal of Zebra shares whether or not he is UK resident in 2017/18; If (contrary to SJE’s opinion) H is found to be UK resident there is a 20% likelihood that H will have to pay CGT

3 August 2018                        Order of DJ Duddridge [1/B72] re H’s FLA applications dated 05.02.18 and 22.02.18

Consent order: applications to be adjourned generally with liberty to apply (to be dismissed if no application to restore within 6 months)

16 August 2018                      Decree Nisi pronounced

21 August 2018                      Farrers to AFP: W did not send all images copied from laptop

31 August 2018                      Letter from SJE [2/D21], responding to questions asked by AFP in relation to the SJE tax report

13 September 2018                 SJE valuation of France at €3,620,000 [2/D24]

14 September 2018                 W’s section 25 statement [2/C289]

H’s section 25 statement [2/C449]

                                                Statement of WD [2/C535]

                                                Statement of Ms U [2/C541]

W’s Hearsay notice re: evidence from previous owner of French property [1/B73]

Parties’ updating disclosure for final hearing exchanged (including H’s voluntary replies to W’s further questions in respect of which no order made on 29.6.18)

17 September 2018                 Farrer receive £350,000 from Litigation Loans

24 September 2018                 [1/A1] W’s open proposal: £16m lump sum + H pay W’s loans of c£740k

26 September 2018                [1/A3] H’s open proposal: £4.85m lump sum + W’s reasonable outstanding legal fees

2 October 2018                      H’s Hearsay notice re: evidence from neighbour

                                               H’s service on W’s solicitors of copy messages between parties

8 October 2018                       Final Hearing (7 days)