BM v MB v GM v X (Financial Provision: identification of Marital Assets/Avoidance of Disposition Order [2025] EWFC 129
23rd Jun 2025 | Cases
This was a decision of Recorder Fiona Hay of Harcourt Chambers sitting as a s. 9 Deputy High Court Judge.
In a wide ranging judgment on financial remedies the learned judge considers numerous issues with regard to valuation of a family company, the computation of matrimonial assets/acquest, and an application for s.37 windback relief.
The judge in particular noted that the case exemplified the capacity of litigation to exacerbate family conflict and to generate litigation out of proportion to the issues.
H was 60. W was 61. There were 4 parties to the litigation; the spouses and H’s Mother and the trustee (together with the husband) of a trust into which shares of the family company had been placed.
An application for 3.37 windback/set aside relief was made in respect of 2 transactions prior to the court process whereby H had divested himself of 25% of his shareholding in the family company to the trust and two parcels of land.
This was a long marriage and involved a former matrimonial home worth £4.25m and a family company adjacent to the FMH. The business had been valued by an SJE at £20.26 m.
Having heard the evidence, the judge made an order that:
1) Set aside the impugned transfers by H of the shares and land
2) Ordered H to pay a lump sum of £5.37m
3) Ordered W to transfer her shareholding in the business to H
4) Ordered H to discharge W’s DLA
5) Ordered a pension share of 16%
6) Chattels if necessary to be divided by means of coin tosses as proposed by H
The case provides one of a growing number of instances of a party (W) being sanctioned in costs for a failure to negotiate openly, notwithstanding H’s litigation conduct in divesting himself of assets with the intention to defeat W’s claim. H did however have to pay W’s costs of the s. 37 application.
Recorder Hay disregarded W’s conduct allegations within her statements because they had not been properly pleaded and on the basis of the cases of Peel J Tsvetkov v Karyoca [2023] EWFC 130 and N v J [2024] EWFC 184 such allegations of conduct needed to pass a “high hurdle”.
The judge applied the tripartite test for s.37 set aside from Agrest v Kremen [2010] EWHC 2571 being whether the following matters were made out:
• Had the disposition or dispositions been had the effect of defeating/reducing/frustrating the enforcement of the likely claims?
• Were the dispositions made with that intent?
• Should the court exercise its discretion to set the disposition/s aside?
The Court found the statutory test to be met and saw no reason to not exercise its discretion.
In terms of the computation of the matrimonial acquest the court adopted a Robertson v Roberton [2016] EWCA Civ 1866 “intuitive” approach to the marital proportion of the business, in part due to the lack of historical and/or accountancy evidence, as opposed to a formulaic straight line calculation.
The Court was of the view that, save where special contribution is in issue, there is no obligation on the court to explore the role the parties played in wealth generation.
With regard to the company valuation, the court did not consider there to be a need or discounts because of minority holdings (as the only conceivable way the company could have been sold would have been by the family shareholders selling in concert) or for liquidity considerations (which did not arise on the evidence).
