H v H (Divorce: financial provision)
| Jurisdiction | England & Wales |
| Judge | THE HON. MR JUSTICE MOYLAN,The Hon. Mr Justice Moylan |
| Judgment Date | 26 March 2008 |
| Neutral Citation | [2008] EWHC 935 (Fam) |
| Docket Number | Case No: FD05D06790 |
| Court | Family Division |
| Date | 26 March 2008 |
[2008] EWHC 935 (Fam)
IN THE HIGH COURT OF JUSTICE
FAMILY DIVISION
The Hon. Mr Justice Moylan
Case No: FD05D06790
Timothy Bishop (instructed by Messrs Sears Tooth) for the Applicant
Mark Johnstone(instructed by Davies Arnold Cooper) for the Respondent
Hearing dates: 5, 6, 7, 8, 9 and 19 November 2007 and 26 March 2008
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken ofthisJudgment and that copies of this version as handed down may be treated as authentic.
This judgment is being handed down in private on 26 March 2008. It consists of 23 pages and has been signed and dated by the judge. The judge hereby gives leave for it to be reported.
The judgment is being distributed on the strict understanding that in any report no person other than the advocates or the solicitors instructing them (and other persons identified by name in the judgment itself) may be identified by name or location and that in particular the anonymity of the children and the adult members of their family must be strictly preserved.
This judgment follows the hearing of the Wife's ancillary relief application.
The Wife is represented by Mr Bishop and the Husband by Mr Johnstone.
I have heard oral evidence from the Wife; the Husband; two expert accountants, Jeffrey Nedas of BDO Stoy Hayward for the Wife and Mr Epstein of Haslers for the Husband; and an enquiry agent. The trial bundles were far more extensive than required. I have been referred to only a very small number of the documents. I have also had comprehensive written and oral submissions. I have taken all the matters raised by them into account when reaching my decision.
The main factual issue between the parties is the value of the restaurant business owned by the parties and operated by the Husband. The very substantial difference between the experts derives partly from factual issues, which have an effect on the maintainable earnings for which they each contend, and partly from a significant difference between them as to the appropriate multiple (6 against 9). When reviewing this aspect of the case, I will have to make such findings as I consider necessary for the purposes of my decision. However, throughout the hearing I have been concerned at the forensic approach adopted by the parties.
The experts agree that the exercise they are engaged in is an art and not a science. As Lord Nicholls said in Miller v Miller; McFarlane v McFarlane [2006] 2 AC 618 [26]: “valuations are often a matter of opinion on which experts differ. A thorough investigation into these differences can be extremely expensive and of doubtful utility”. I understand, of course, that the application of the sharing principle can be said to raise powerful forces in support of detailed accounting. Why, a party might ask, should my “share” be fixed by reference other than to the real values of the assets? However, this is to misinterpret the exercise in which the court is engaged. The court is engaged in a broad analysis in the application of its jurisdiction under the Matrimonial Causes Act, not a detailed accounting exercise. As Lord Nicholls said, detailed accounting is expensive, often of doubtful utility and, certainly in respect of business valuations, will often result in divergent opinions each of which may be based on sound reasoning. The purpose of valuations, when required, is to assist the court in testing the fairness of the proposed outcome. It is not to ensure mathematical/accounting accuracy, which is invariably no more than a chimera. Further, to seek to construct the whole edifice of an award on a business valuation which is no more than a broad, or even very broad, guide is to risk creating an edifice which is unsound and hence likely to be unfair. In my experience, valuations of shares in private companies are among the most fragile valuations which can be obtained.
Both parties seek clean breaks. By her Open Proposals dated 17 th October 2007 and at the hearing the Wife has sought 50% of the parties' net assets with child maintenance of £12,000 per year for each child plus the payment of school fees. Mr Bishop's final Schedule values the total wealth at approximately £7.6 million of which the business valuation accounts for approximately £5.3 million. Mr Bishop, therefore, submits that the Wife should receive £3.8 million. To achieve this, the Wife would have to receive all the liquid wealth and the Husband would have to borrow approximately £1.6 million through the business. This is on top of existing borrowings of £1.8 million.
The Husband's final position has moved from that set out in his Open Proposals dated 23 rd October 200In those proposals he sought a school fees' fund of £350,000 and the sale of the former matrimonial home. It was proposed that the Wife should receive, on a clean break, what was then calculated as being 42% of the remaining wealth, namely approximately £1.7 million of £4 million. Mr Johnstone's final Schedule values the wealth at a total of £4.2 million. The Husband still seeks the creation of a school fees' fund but at the reduced level of £260,000. He also still seeks the sale of the former matrimonial home with the Wife, effectively, receiving all the net proceeds of sale. In his final submissions, Mr Johnstone submits that the Wife should receive approximately £1.3 million net (after deducting legal costs which Mr Johnstone submits should not be deducted for reasons I will deal with later in this judgment). It is acknowledged that this is insufficient for a clean break which, it is submitted, would require the Wife to receive an additional £300,000. It is submitted that this would give the Wife an unfair proportion of the wealth.
Having read the papers and each party's written arguments, at the outset of the hearing I had formed the provisional view that each party had adopted what I regarded as the most extreme possible position. Each party clearly faced substantial hurdles in seeking to achieve their respective positions. It was, of course, only a provisional view, but I was surprised that the parties appeared to consider that the bracket of reasonable orders extended as far in either direction as contended for by them. I also did not consider that this was a helpful approach for them to have adopted. To adopt such extreme positions does not assist the court or, in my view, the parties in seeking to achieve a result which is fair both in outcome and in the manner in which it is achieved.
History
The Husband is now aged 64. The Wife is now aged 49.
The parties met in 1988 and started living together in 1990 when the Wife moved into the Husband's property at South Kensington, London. The marriage took place on 18 th August 1990. It is the Husband's second marriage. The parties separated in 2004. Divorce proceedings were commenced and a decree nisi pronounced. They then reconciled and the decree was rescinded. The marriage broke down finally in 2005 with the Wife filing a new Petition on 8 th December 2005. The effective duration of the marriage is, therefore, 15 years. The Husband left the former matrimonial home in August 2006.
There are two children of the family: R aged 13; and J aged 10. Both children are in full-time education. They are both being privately educated. There is some doubt as to which schools they will each go to in the future but both parents want them to continue to be privately educated. The only difference between the parties is that the Husband seeks the creation of an education fund to pay for or assist with future school fees.
The Wife studied and trained as a fine artist. This included two years at the Slade between 1986 and 1988. The Wife worked as an artist during the early years of the marriage. She had a studio and sold work at annual exhibitions. She has not pursued this career effectively since the younger child was born.
The Husband is, by training, a chef. He has spent the vast bulk of his career working at one restaurant, “Q”. This restaurant is situated in London and has been operating at these premises since 1972. It is and has always been a single site restaurant. It is in an area of London which has always been relatively affluent but has become increasingly affluent and fashionable over the course of the last 30 years as London has benefited in particular from the wealth generated by the financial services industry.
The first matrimonial home was the Husband's flat at Melton Court, London. In 1997 the family moved to another flat in Melton Court,. This property was bought for £560,000 and the previous one was sold for £460,000. In January 2004 the final matrimonial home was purchased for £1.1 million. This property is in Battersea. Melton Court was let until it was sold in February 2007 for just under £980,000 net. The net proceeds of sale (less amounts deducted since) are held for the parties by a firm of solicitors, Healys.
In addition, for much of the marriage the family had a holiday home in Normandy. This had been purchased by the Husband in 1989 and was bought by him for £111,000. This property was sold in 2005 and the net proceeds of sale of £448,000 are held in the parties' joint names.
The Husband began working in Q in 1974. Very shortly after this, on 16 th June 1975, he and a colleague entered into a licence agreement with the owners of the restaurant, In 1976 they set up a company, now called Y Ltd, through which they operated the restaurant. In 1986, the Husband bought his colleague out. The licence agreement was also amended and made personally with the Husband. The licence was determinable on six months' notice.
The Husband has set out in his main...
To continue reading
Request your trial
- E v L
-
N v F
...[2011] 1 FLR 64. Gojkovic v Gojkovic [1990] FCR 119, [1990] 2 All ER 84, [1992] Fam 40, [1991] 3 WLR 621, [1990] 1 FLR 140. H v H[2008] EWHC 935 (Fam), [2008] 2 FLR 2092. Haldane v Haldane [1977] AC 673, [1976] 3 WLR 760, PC. Jones v Jones[2011] EWCA Civ 41, [2011] 1 FCR 242, [2011] 3 WLR 5......
-
H v H
...30 second rule and introduction of Reg NMS. 11 A submission which he sought convincingly to bolster by reference to what Moylan J had said in H v H [2008] EWHC 935 (Fam), [2008] 2 FLR 2092, at paras [4]-[5] and [104], observations with which I entirely 12 Though he equally accepts, as I und......
-
Camilla Eva Carin Versteegh v Gerard Mikael Versteegh
...and that, if the variables render such a valuation to be particularly friable, the court should simply adopt a conservative figure. 136 In H v H [2008] 2 FLR 2092 Moylan LJ highlighted the fact that the vulnerability of valuations had been specifically recognised by the House of Lords in Mi......