ANCILLARY RELIEF/ NON-MATRIMONIAL ASSETS: Jones v Jones [2011] EWCA Civ 41

03 MAR 2011

(Court of Appeal; Wall P, Arden and Wilson LJJ; 28 January 2011)

The parties separated in 2006 after a 10 year marriage. A company founded by the husband before the marriage was valued at £2 million just before marriage. During the ancillary relief proceedings, the company was sold for £32m, of which the husband received £25m. The wife appealed the decision of Charles J in J v J [2009] EWHC 2654 (Fam). The judge had awarded the wife £5.4m on a clean break basis, of which £400,000 was in respect of her costs. The wife sought, as she had at first instance, £10m.

Held it was not appropriate to capitalise earning capacity as at the date of the marriage and treat it as a capital asset - the judge's approach was wrong (GW v RW overturned). It was however appropriate to incorporate the spring-board effect and passive economic growth into the value of a company at the date of marriage. The court should first divide the assets into matrimonial and non-matrimonial, but often a precise division is unlikely to be required. The sharing principle should then be applied and the overall percentage division considered as a cross check.

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