ED v AP [2025] EWFC 399

Judgment date: 23 September 2025

https://caselaw.nationalarchives.gov.uk/ewfc/2025/399

HHJ Hess (sitting as deputy High Court judge). Final hearing in financial remedy proceedings. The judge dealt with how to formulate a fair Wells sharing order concerning contingent interests the Husband might receive as a result of his work.

Background

W (aged 60; a homemaker for over 30 years), and H (aged 65; worked in private equity) had had a marriage of some 30 years before separation in 2023; [9], [10], [11] and [16]. They had four children aged between 20 and 28; [13].

Approximately £7,500,000 of liquid matrimonial assets had been transferred to their children, mostly during the previous four years; [15]. With the knowledge but without the active support of W, H had: 1. financed the purchase of Property S, which was held jointly and equally between the children; and 2. invested into investment accounts for the children; [15]. W did not suggest that the transactions should be set aside or should generate an add-back; [15]. Conduct was not argued; [15].

The law

The judge considered the factors set out in Matrimonial Causes Act 1973, ss 25 and 25A; [26]. Neither side sought spousal periodical payments beyond implementation, so s 25A was not engaged; [26].

The judge also conducted his analysis against six relevant principles from case law:

1. That in the computational phase, the court should identify a distinction between matrimonial property and non-matrimonial property, per Standish v Standish [2025] UKSC 26 at [47]; [29].
2. That there should be no discrimination between the breadwinner and the homemaker when evaluating fruits of the marriage produced by common endeavour, per White v White [2001] AC 596 at p.605; [30].
3. That in the distributional phase the court should seek to divide the matrimonial property equally, but to leave the non-matrimonial property with the contributing party, per Standish v Standish [2025] UKSC 26 at [7] and [48], and JL v SL [2015] EWHC 360 at [18]; [31].
4. That there can be a departure from sharing with good reason (e.g. needs or compensation), per Miller v Miller; McFarlane v McFarlane [2006] UKHL [16]; [32].
5. That an earning capacity is not an asset subject to the sharing principle, per Waggot v Waggot [2018] EWCA Civ 727 at [121]–[122]; [33].
6. That once separation has occurred, a party’s post-dating endeavour is not common marital endeavour, per C v C [2018] EWHC 3186 at [40]; [34].

Capital and income resources

The judge placed assets and debts into two discrete categories, which fell to be treated in different ways by the order:

• assets and debts that exist in the moment and on which a present value can be placed; and
• assets and debts which are contingent on potential future events; [38].

Category 1 assets and debts

Inter alia, the judge determined the following.

H was a Settlor of a discretionary trust (‘LM Trust’); [42]. H submitted that the trust should be transferred to the children through H and W resigning as beneficiaries and W paying £150,000 to H; [42(ii)] W submitted that since the children had already received large amounts, the trust was a resource in joint names but one fully available to H; [42(iii)]. The judge agreed with W’s position, declaring that ‘if he decides to give it to the children that will be his choice, but not at the wife’s expense’; [42(iii)].

The judge noted H’s lack of care in his disclosure obligations; [42(i)] and [42(iv)].

The net figures of the parties’ pensions were held to be immediately realisable and akin to cash in the bank; [43].

H’s debt to a medical professional, which he had been litigating in the county court, was an accepted debt, but no figure for future litigation funding was accepted; [44].

H had an interest in the ‘ZP investment’, which was deemed to be illiquid but potentially valuable; [46]. Deductions were disputed:

1. W contended that 12% Remittance Tax, available via the HMRC Temporary Repatriation Facility, should be taken off; H asserted that a later remittance at 45% should be taken off. The judge preferred W’s case; [46(iv)].
2. W said there should be no ‘court discount’ on a ‘broad evaluative basis’ reflecting illiquidity (per Peel J’s analysis in HO v TL [2023] EWFC 215. H said the figure should be 20%. The judge preferred H’s case on the basis of the asset’s illiquidity; [46(iv)].

W’s position was that the family home should be transferred to her with a lower equalising sum; [49]. H contended that W’s position would leave him with an unfairly low amount of liquid capital and that the family home should be sold with an equal division of the net proceeds and a higher equalising sum; [49]. The judge accepted that W should retain the home (as it was financially viable) but reduced the lump sum due from H to W to reflect the purchase costs H might incur on a new property; [50].

Neither the needs principle nor the compensation principle were relevant; [51].

Present and likely future income

The judge considered the likelihood of H continuing work, given its consequence for what would be derived from his private equity carry; [52]. He concluded that H would continue to work at the same level for one or two years and that thereafter a compromise outcome would be reached; [52].

The sharing principle and category 2 assets and debts

The assets all arose from interests which H might receive through his work; [56].

The judge noted the difficulty of formulating a fair Wells sharing order that reflected the aforementioned sharing principles; [58].

The decisions regarding private equity carry in B v B [2013] EWHC 1232, A v M [2021] EWFC 89 and ES v SS [2023] EWFC 177 were considered, including:

• the private equity model process (described in detail by Coleridge J in B v B);
• that entitlement to future carry is a hybrid resource (A v M at [10]; B v B at [47]); and
• that the division of carry interests in this instance was most fairly achieved through a broad evaluation rather than the narrow mathematical formula devised by Mostyn J in A v M; [58(v)].

The judge considered how the rights would have looked had H resigned from his employment in November 2023, at the point of separation; [65].

With respect to the Category 2 assets and debts, the judge concluded:

1. W was entitled to share in three fund carry interests, as they were all substantially the product of H’s endeavour during the marriage; [66(i)].
2. The fair figures for W’s sharing claim for each interest varied between 50% and 30%; [66(ii)].
3. W should undertake to reimburse H with 35% of the monies which fell to be repaid under the ‘BN’ loan, including interest. There would be a charge against the family home to secure the obligation, which could be transferred to a replacement property if W moved; [66(iii)].
4. W should receive a lump sum equivalent to 50% of any future return on the interest in the ‘CYT’ fund, limited to those allocations up to the end of 2024; [66(iv)].
5. W should receive a lump sum equivalent to 50% of any future return on the interest in the synthetic equity and/or growth share entitlements received by 6 November 2025, reduced to 25% between 6 and 7 November 2025 and nothing afterwards; [66(v)].
6. Nothing else should be regarded as the product of marital endeavour; [66(v)].

Additional outcomes

The family home should be transferred to the wife, division of chattels to be agreed; [67(i)]. Property B should be sold and the net proceeds divided equally; [67(ii)].

The joint bank accounts should be transferred to H; [67(iii)]. H should pay W a lump sum of £3,443,771; [67(iv)]. W should remove herself as a beneficiary from the LM Trust; [67(v)].

The judge recommended that the parties agree on a targeted form of commitment to future disclosure relevant to the interests in the Company A assets; [67(vi)]. Otherwise, there should be an immediate clean break; [67(vi)].