ES v SS
[2023] EWFC 177
CG v DL
25 May 2023
[2023] EWFC 82
Family Court
A wealthy couple divorced. The husband's hedge fund was hard to value, so the judge split their other assets and gave the wife a share of the husband's fund profits for a few years to be fair, since she helped build it up during their marriage. A large sum the husband gave her wasn't included in this split.
Key Facts
- •Applicant wife ('W') and Respondent husband ('H') married in 1998 and separated in July 2020.
- •Both parties are 59 years old with two sons (aged 19 and 13) in private education.
- •H is a founding partner of a hedge fund (SC) which he established in 2015 using marital assets.
- •H had a short-lived affair in 2017, followed by a period of harassment and stalking, resulting in a £1m transfer to W.
- •The parties dispute the treatment of this £1m transfer.
- •The couple's assets totalled £27.188m, with a significant portion invested in H's hedge fund.
- •The valuation of SC is heavily contested by experts, making precise asset division challenging.
- •W seeks a share in future profits from SC, while H argues for a clean break.
Legal Principles
Post-separation accrual of assets should not be treated as non-matrimonial unless it relates to a period at least 12 months after separation.
Rossi v Rossi [2007] 1 FLR 790
A spouse's share of assets may be on risk between separation and trial, entitling them to a share of any resulting profits.
Cowan v Cowan [2021] 2 FLR 192
It is not necessary to put a precise valuation on an asset if it would be a wild guess.
Versteegh v Versteegh [2018] 2 FLR 1417
Courts should consider the future income stream of a party when deciding the overall fairness of an asset division.
Cooper-Hohn v Hohn [2015] 1 FLR 745
The sharing principle is applicable to assets created during the marriage; however post-separation accrual should be treated differently, and might not be shared equally.
JL v SL (No.2) [2015] 2 FLR 1202
An earning capacity is not a matrimonial asset, and extending the sharing principle to post-separation earnings would undermine clean breaks.
Waggott v Waggott [2018] 2 FLR 406
Outcomes
The £1m transfer from H to W is not subject to equal sharing; W retains it entirely.
The transfer was intended as an amends for H's behaviour and its consequences.
50% of H's 2021 profit share is included in the matrimonial assets; 50% of the 2022 profit share is excluded.
2021 profit share was accrued too close to separation; 2022 profit share was further removed from the marital partnership.
W receives 17.5% of H's profits from SC for the years 2023-2026; or the same percentage upon disposal of his shareholding.
Reflects W's contribution to the business during the marriage but avoids indefinite sharing of future earnings.
W receives additional financial awards to achieve approximate equality of assets after accounting for the £1m gift and certain other considerations.
To achieve a fair outcome reflecting assets built together and H's future earning capacity.
Specific child maintenance and school fee arrangements are ordered.
Balances the parties' abilities to support their children and reflects H's unpredictable income stream.