(Family Division, Moor J, 30 July 2015)
Financial remedies – Sharing basis – Assets held in husband’s sole name – Whether the husband and wife were the only founding partners of the family business
Please see attached file below for the full judgment.
In financial remedy proceedings following divorce the wife was found to have been a founder of the family business with the husband and was, therefore, entitled to an equal share of the matrimonial assets.
The husband and wife were married for 16 years and had no children together. In financial remedy proceedings following divorce there were total assets of £19m, all held in the husband's wife, despite the fact that she was an equal partner in the family business. That business was formed by the husband and wife in 1990 and was eventually incorporated in 1996. The husband became the sole shareholder and director.
The husband's father established a trust which was used by professional trustees to purchase the husband's shares in the business. It was an interest in possession trust under which the husband was a life tenant and there was a wider appointable class which included the husband's sisters and half-brother. In the proceedings the husband and his father argued that the business was a three-way joint venture while the wife argued that the husband had acted as a de facto treasurer for which he had been renumerated for the work he undertook. The business was sold in 2012 for £17.6m and the proceeds were paid to the trust. The wife received no benefit.
In addition to the business there were two properties which had been used as matrimonial homes but which were both held in the sole name of the husband. Following the sale of the business a number of other properties were purchased and held through various different structures.
The judge determined that the trust held assets of £14m and there were four properties which should be included in the overall assets schedule. In total there were assets of £19,057,361.
The husband and wife were founders of the business and the husband's father was not. The husband's submission that there should still be a departure from equality in the division of assets to reflect the fact that the assets were held by the trust and he did not, therefore, have unrestricted access to the money. The husband was found to have been the only person who had directly benefited from the trust.
The purchase of the original matrimonial home pre-dated the marriage and given the significant and unmatched contribution made by the father in relation to that property the husband was entitled to a significant departure from equality in that respect. The judge, therefore, removed £3m from the total asset figure.
The remaining assets of £16,144,861 would be divided equally on a sharing basis. The wife would receive the second matrimonial home and the balance in a lump sum order.
Case No: FD14D00806
Neutral Citation Number:  EWHC 2797 (Fam)
IN THE HIGH COURT OF JUSTICE
Royal Courts of Justice
Date: 30th July 2015
Mr Justice Moor
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Mr Nigel Dyer QC and Mr Tom Carter (instructed by Lee & Thompson LLP) for the Applicant
Miss Deborah Bangay QC and Miss Nikki Saxton (instructed by DWF LLP) for the Respondent
Hearing dates: 20th to 30th July 2015
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FB v PS  EWHC 2797 (Fam)