The value of a family business or business interest is treated as an asset and therefore part of the matrimonial pot to be distributed when it comes to negotiating a financial settlement on divorce or...
(Family Division, Nicholas Francis QC, sitting as a deputy High Court judge, 17 January 2014)
In financial remedy proceedings following divorce, a preliminary issue trial was scheduled in order to determine whether the most substantial matrimonial asset, namely, company shares of a family business held by the husband and wife, were held on trust for the intervenor, one of their children.
The husband and wife were married for 43 years and had four adult children. When the family business fell into decline, the intervenor took over the running of the business and turned it around. In return he claimed it was agreed that he would receive a 50% interest in the company shares and stood to inherit a further 50% upon the death of the husband.
In accordance with the authority of Drake v Whipp  1 FLR 826, there was an agreement to which the husband, wife and intervenor were all parties that the intervenor would take over the running of the company in return for shares. However, it was clear that they did not reach a binding agreement regarding the receipt of shares via the husband and wife's wills as there was clear evidence that tax advice was that they should not do so. The beneficial interest in the husband's shares remained with the husband.
There was no agreement, no common intention trust or proprietary estoppel and no case as to detriment was made out. The intervenor's claim for a declaration that the shares were held on trust for him failed.