Recorder Nicholas Allen KC. Final hearing to determine the date of separation and accordingly the extent of post-separation endeavour.

The parties met in February 2007 and cohabited before marrying in June 2008. They had three children. H left the FMH on 16 August 2020 and W issued a divorce petition on 27 March 2021.

There were two factual issues to determine: (i) the date of the parties’ separation; and (ii) whether they reached an agreement at that time in relation to their finances. The judge then needed to consider the law in relation to post-separation endeavour which W said justified a departure from equality in her favour; [30].

Date of separation

Separation in many senses is the obverse of cohabitation; [39]. The parties’ respective dates of separation correlated with their respective cases in relation to post-separation endeavour in respect of W’s business interests. H’s case benefitted from a later date of separation whilst W’s case benefitted from an earlier date. Accordingly, both parties had the same motivation in relation to their evidence; [44].

After a detailed review of the caselaw on the date of separation, the judge concluded that although the parties had discussed trial separation in July 2020 and early 2020, they had permanently separated by the end of August 2020, given:

1. After moving out of the FMH, H transferred all the utilities and similar bills into W’s sole name, which would have been unnecessary for a trial separation; [45(b)];
2. H took a 12-month tenancy at his new rental property; [45(d)];
3. The first time H put the date of separation in issue was in his statement responding to W saying that her business was very different as a consequence of events in January 2021, he having not disputed W’s assertion that separation was in August 2020 until that point; [45(j)];
4. Children Act proceedings were initiated shortly after H left the FMH after mediation broke down; [45(m)].

Per Peel J in VV v VV [2023] 1 FLR 170, human relationships are complex. The disentanglement of a relationship may not have an exact bright line; [48].

Agreement

W contended that the parties reached an overall financial agreement as at the time of their separation in August 2020, relying on the spreadsheet produced by H at the time of the parties’ assets on or around 1 September 2020; [50]. The judge was not satisfied that an overall agreement was reached, for reasons including lack of inclusion of some issues and lack of contemporaneous evidence; [56].

Post-separation endeavour

W held shares and options in JP Headco. W said JP was severely affected by a directive in January 2021, and as a consequence she had to remodel the business entirely to stay afloat, taking ‘radical steps’ to do so; [64]. After reviewing the case law including DR v UG [2023] EWFC 68 – summary here – and JL v SL (No. 2) (Appeal: Non-Matrimonial Property) [2015] 1 FLR 1202: W’s current business interests comprised both matrimonial and non-matrimonial property in that they were partly the product of marital endeavour and partly the product of a source external to the marriage, namely unmatched post-separation endeavour; [71]. Given the parties separated in August 2020 when the business was not of significant value, the matrimonial element was a relatively small one; [72]. The court held that 35% of the value of W’s present business interests were matrimonial and the remaining 65% non-matrimonial.

Cap

H’s share of matrimonial property, if ascertainable, should cap his entitlement and any growth beyond that should be W’s alone. However, W had been trading with H’s share since separation and was being renumerated for her work; [85]. On balance, H would need an uncapped share given:

1. The parties had not reached an overall agreement in August 2020 upon separating; [89];
2. H had made career sacrifices to support W; [92];
3. An absence of a cap was required in order to meet needs ([95]) and it could not be said that H’s capital needs would be met by reliance on his new partner.

H’s uncapped share was to be subject to a sliding percentage of 17.5% in the years up to and including 2038 (when the youngest child will turn 18) and 10% thereafter, as this struck the right balance between W’s post-separation endeavour and the requirement to meet H’s needs.