Stephen Trowell KC as deputy High Court judge. Final hearing where the sole issue was how to divide proceeds of sale of a business. An earlier Daniels v Walker application in this case is reported here.

The parties cohabited from 2005, married in 2007 and separated on 25 November 2019. They have two children who split time between the parents. In 2021 the parties agreed that the FMG would be transferred into the wife’s sole name. However, they were unable to agree the division of the business proceeds (c.£35 million) that made up the bulk of their assets.

H argued that a significant part of the proceeds of sale derived from post-separation endeavour (over 2 years and 2½ months) and were thus non-matrimonial. W argued that the business was matrimonial and its increase in value before it was sold post-separation was not due to any new endeavour by H.

Discussion of post-separation endeavour in SK v WL [2011] 1 FLR 1471, Evans v Evans [2013] 2 FLR 999, Cooper Hohn v Hohn [2015] 1 FLR 745, JL v SL (No 2) [2015] EWHC 360 (Fam), 1 FLR 745, C v C (Post Separation Accrual) [2019] 1 FLR 939, E v L (financial remedies) [2021] EWFC 60, and DR v UG [2023] EWFC 68 – summary here. Judge concludes at [74] that:

1. Post separation non marital assets can exist at the date of trial even where there has been no undue delay;
2. In assessing post separation non marital assets I must guard against counting in the product of passive growth;
3. I should remain mindful of the extent to which the person claiming post separation assets is simply benefitting from investing the unallocated funds of the other spouse;
4. I should not overlook the domestic contribution which may be taking place by the other spouse;
5. While a formulaic approach may be better than a 'by and large' approach I will have to make such assessment as I best can on the facts as I find them.

The value of the business as at 2019, which was £28.1 million, was determined by an SJE taking a ‘present day approach’ whereby he would transport himself to November 2019 and reach a conclusion on the figures available without reference to subsequent figures. However, the business sold in 2021 for £70 million albeit that some consideration was deferred and some by way of equity in a new holding company. Judge adopted £30 million as valuation at time of separation and £60 million as a rough and ready assessment of the true value of the sale. These figures had to be treated as fragile: the SJE accepted that there were limitations.

Judge held that H had made a significant contribution to the increase in value of the business post-separation. However, there were other contributors including passive growth, changing market conditions, and four specific market trends favouring this type of business. Moreover, W had made a continuing contribution as a parent and especially so when H was busy with the sale.

Taking a ‘by and large’ approach to these factors, the appropriate division was 42.5% proceeds to W and 57.5% to H, meaning that H’s post-separation endeavour was put at a rough 15%.