Sir Jonathan Cohen. W’s application for financial remedy which included aspects of pre-marital property, post-separation accrual and Wells sharing.

The parties married in 2005 with no pre-matrimonial cohabitation. They had three children aged between 12 and 16 who attend private school. After the birth of the parties’ first child in 2004, W became a full-time mother. H worked in the private equity sector; the date of the marriage was very close to the date of him leaving ABC private equity firm.

Pre-matrimonial assets

At the time of the marriage H’s wealth was around £13m:

• £2.2m in savings
• European farmhouse (equity of £500k) and another farmhouse which was sold during the marriage.
• A right to equity of £9.7m from ABC firm, which he acquired when he left.

Sir Jonathan Cohen treated these assets, bar the final one, as entirely non-matrimonial. It did not matter that they had holidayed at the European farmhouse during the marriage: the longest they had spent there was three months and on average they stayed there for a month. W had made no meaningful contribution to the property. 35% of the £13m was treated as non-matrimonial.

However, the family lived off the £9.7m between 2005 and 2014 because H had no income. There was, therefore, mingling.

Post-separation accrual

In 2008 H started another firm (XYZ) focusing on non-fund investments. Returns were not generated until 2016 and were modest from 2010–2015. There were also five investments from 2018–2020 which were due to exit during/after proceedings (E Co, F Co, G Co, H Co and I Co).

An agreement was struck between the parties at the pFDR in September 2022. W was to receive £9m out of £24.5m. However, before the order could be drawn up it was discovered that H’s receipts from E Co would be no less than 49.9m euros when its valuation at FDR was £4m. H agreed the FDR agreement had to be set aside and he would pay the costs on an indemnity basis. In February 2023 G Co then sold for three times the value attributed to it by H, and three other investments (F Co, H Co, I Co) from the 2018–2020 period had not exited yet.

In 2020 H was able to start a private equity fund structure (New XYZ) that he had wanted to in 2008. This was successfully argued by H to be post-separation accrual.

Naturally, the date of separation was in dispute. Sir Jonathan Cohen found the relationship had been limping for a long time and Covid-19 prevented separation. W had written to H twice in November 2019 asking him to move out and she had bought herself a new home. He judged the date of separation to be early 2020 and the fact they had had holidays and birthdays together after that time was neither here nor there as it was an attempt to make life easy for the children.

Sir Jonathan Cohen was only asked to value H Co and he considered a Wells sharing order to be the best path for H Co and F Co NFIs due to the potential for considerable unfairness if a clean break were to be ordered. This was despite valuations being broadly similar and the fact that W’s claim could be met without using a Wells sharing order. However, W argued that E Co’s valuation had been massively out, and to a lesser extent so had G Co’s.

In relation to H Co, W would receive 20% of H’s share because it was identified in 2019 but not fully funded until March 2020 and the exit had not yet occurred. Therefore, the judge needed to reflect the post-matrimonial endeavour that would continue with this NFI. With F Co, W obtained 40% because it was identified in 2017 and invested in in 2018. W also obtained 25% of H’s share in G Co but not on a Wells sharing basis as the proceeds had already been received.

W would not obtain any benefit in New XYZ, however, she was entitled to 50% of H’s working capital in the old business.

Two further NFIs were contained in a trust structure as well as monies H transferred to W. W and H were given joint powers in relation to the trust and were able to each appoint a protector for the trust. This needed to be considered by the trustees so this part of the claim was adjourned until they had had an opportunity to do so.

The outcome in round terms was 60:40 in favour of H.