The parties cohabited in 1996, married in 1997, separated in 2019. They had 5 children (now 9 to mid 20’s).
The parties entered into a prenup of which only a draft copy could be produced, it did not provide for the reasonable needs of W, who on marriage had little assets.
H started working in his fathers business in 1987 and effectively took control of it in 1993.
The judge cited from established precedents - ‘The overall requirement in applying section 25 is to achieve fairness[1]. It was made clear in the seminal House of Lords decision of White v White [2000] UKHL 54; [2001] 1 AC 596 that there is to be no discrimination in financial remedy cases between a husband and wife. This was expanded upon in K v L [2012] 1 WLR 306, CA.’
The judge had little difficulty dealing with the prenup, it failed the Radmacher v Granatino test as it provided no provision at all for W, she would have ultimately faced a 'predicament of real need’.
How to treat H’s business provided more exercise for the little grey cells. H’s father started the business in the 1950’s, and H became the COE in 1993. H’s case was that the majority value of the business was down to the creativity of his father, whereas W contended it was H who transformed the business during the marriage.
The judge considered three approaches to valuing a business pre/post marriage/separation and its increase in value, that in Hart v Hart 2017 EWCA Civ 1306, that in WM v HM 2017 EWFC 25. and that in Jones v Jones 2017 EWCA Civ 41.
As the judge said ‘The difficulty, (with WM v HM), is that it does not reflect the situation in this case where the company was commenced in the 1950s but had only grown to less than 20 stores by 1997, as against exponential growth thereafter to a total of more than 100 stores’. The judge therefore declined a straight line valuation as used by Mostyn J in WM v HM.
He adopted an approach more in line with Hart v Hart.
A prime issue that Mr Justice Moor had to decide was whether the pre-marital assets should be excluded from the 'matrimonial pot' for distribution on the basis of 'unmatched contributions justifying a departure from the sharing principle'.
The judge determined that a significant proportion of the resources came from the endeavours of H's father. However, under H's leadership the business ‘was transformed from a small regional chain to a national powerhouse that could be sold...for over $1 billion. This all occurred during the marriage’.
An evaluation exercise was carried out to determine what reduction on W's share should be made to reflect the non-matrimonial element of the assets. The approach taken was to determine a figure for the non-matrimonial element, deduct that figure from the total asset pool and award W half of the resulting figure.
The result was that W was awarded £70m, or 38% of the net assets, comprising a housing fund of £25m and a Duxbury fund of £45m.
In the big/complex asset cases, the outcome cannot be so readily assessed and it is worth spending money on legal fees to get a judicially determined result. Sadly in many of the cases we deal with, the parties cannot afford such a luxury and many cases are determined at the FDR stage. It is so helpful at the FDR stage if judges do their utmost to be as definitive as possible in their indication.
[1] Fairness is a point that needs to be stressed, when dealing with the distribution of assets and pension funds. Although the trend is to treat each separately, that should not prevent a court from then taking an over view - is it fair overall?
