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Financial remedies – Trust assets – Company shareholding – Whether the trust assets were resources available to the husband – Extent of sharing of assets
In financial remedy proceedings the wife was awarded 37.5% of the assets.
The husband and wife married in 1999 by which point the wife had given up her job in fashion. The husband worked in finance and at the time of the marriage had $1.5m in cash and stocks. During the marriage the wife was a full-time homemaker. The husband set up a company with a business partner and with the assistance of his father. Two trusts were settled in the Bahamas by the husband’s father which held company shares purchased by him. The remainder of the company shares were held by the husband, his business partner and other investors.
During the marriage the husband and wife had four children. The mother was their primary carer. However, she struggled with alcohol abuse and for periods in 2008. 2012 and 2013 she spent time in hospital for treatment for her addiction.
The husband and wife separated in 2013 and the children had chosen not to see their mother since then. They now lived with the husband and his new partner.
The joint asset schedule included the former matrimonial home, worth £11.75m with equity of £2.7m. The company share price at the time of the hearing was £2.16, since then it had risen to £2.73 increasing the kitty by almost £15m. The wife’s liabilities exceeded her assets by approximately £2m. There was a substantial dispute about the value of the company shares which resulted in a difference about the grand total of the matrimonial assets of £26.5m.
The two main issues on computation were whether the discretionary trust was a resource available to the husband and whether the value of his shares (and the trust’s shares) in the company should be subjected to a discount on the basis of his unique importance to the company.
The court rejected the assertion that an adjustment should be made to the share valuation used at the hearing to account for the price increase. The court was satisfied that the trust funds were a resource available to the husband. The total assets were assessed as £36.945m. This was not a case where a special contribution had been established as a factor justifying departure from the yardstick of equality. However, it was accepted that the husband’s post-separation work and endeavours did amount to a significant unmatched contribution to the welfare of the family.The unequal contributions were not so unequal that it would be fair to treat the wife’s needs as determinative of the outcome. Based upon a full consideration of all the evidence a fair award to the wife would be 37.5% of the assets, amounting to £13.854m.