Caselaw Digest
Caselaw Digest

HO v TL

[2023] EWFC 215
A wealthy couple divorced. They fought over their assets, especially a big hotel. The judge decided how to split everything fairly, taking into account how much each person brought into the marriage and their future needs. The wife received a significant amount of money, but the husband kept the hotel and other major assets because his family initially provided much of the wealth.

Key Facts

  • High-value divorce case between a wife (W) and husband (H) with significant assets, primarily stemming from a jointly-owned hotel business.
  • The marriage lasted 17 years and produced three children.
  • The husband's family contributed significantly to the couple's wealth, both pre- and during the marriage.
  • The hotel business, a key asset, was valued at approximately £9.6 million.
  • Significant disputes existed regarding the valuation of the business and the accessibility of assets held in various trusts controlled by H's family.
  • Wife sought £10.9 million, while the husband offered £5.9 million.

Legal Principles

Two-stage approach to financial remedies: computation and distribution.

Charman v Charman [2007] EWCA Civ 503

Valuation of private companies is difficult and uncertain; the court determines value, not the expert.

Versteegh v Versteegh [2018] EWCA Civ 1050; H v H [2008] EWHC 935 (Fam)

Three options for dealing with a business asset: fixing a value, ordering sale, or dividing in specie (Wells sharing).

Martin v Martin [2018] EWCA Civ 2866; Wells v Wells [2002] EWCA Civ 476

Court considers illiquidity and risk of assets when making an award, potentially applying a 'court discount'.

Wells v Wells, Versteegh v Versteegh, Martin v Martin, Chai v Peng

Accessibility of trust interests determined by whether the trustee would likely advance capital in the foreseeable future (Charman test).

Charman v Charman [2005] EWCA Civ 1606; Charman v Charman (No.4) [2007] 1 FLR 1246

Court considers the needs principle and the sharing principle, with needs prevailing if greater than sharing.

Charman v Charman

Court considers the length of the marriage, contributions of parties, and source of wealth when determining needs.

Hart v Hart [2018] 1 FLR 1283; WC v HC [2022] EWFC 22; Miller/McFarlane; FF v KF [2017] EWHC 1093; N v F [2011] 2 FLR 533

Outcomes

The hotel business valued at £9,597,541.

Based on the SJE's discounted cash flow valuation, with adjustments made for various disputed factors.

Wife awarded £7,750,000.

A combination of the sharing principle and needs principle, considering the significant non-marital contributions from the husband's family, wife's age and limited earning capacity, and the need for a clean break.

Husband to retain the hotel business and other assets.

To facilitate a clean break and to reflect the significant contribution of husband's family to the couple's wealth.

Husband's trust assets treated as accessible resources.

Based on the application of the Charman test, considering letters of wishes and the trustees' likely response to a request for funds.

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