Janie Claire Martin v Rupert Henry James Martin

JurisdictionEngland & Wales
JudgeLord Justice Coulson,Lord Justice Moylan,Lord Justice Simon
Judgment Date21 December 2018
Neutral Citation[2018] EWCA Civ 2866
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: B6/2017/1509
Date21 December 2018
Janie Claire Martin
Rupert Henry James Martin

[2018] EWCA Civ 2866


Lord Justice Simon

Lord Justice Moylan


Lord Justice Coulson

Case No: B6/2017/1509



Mr Justice Mostyn

High Court of Justice

Family Division


Royal Courts of Justice

Strand, London, WC2A 2LL

Mr Martin Pointer QC, Mrs Rebecca Carew Pole and Miss Kyra Cornwall (instructed by Boodle Hatfield) for the Appellant

Mr Lewis Marks QC and Miss Katie Cowton (instructed by Radcliffes Le Brasseur) for the Respondent

Hearing dates: 4 th and 5 th July 2018

Judgment Approved

See Appeal and Ancillary Matters (Costs and Appeal) at bottom of this judgment

Lord Justice Moylan



The wife appeals and the husband cross-appeals from a final financial remedy order made by Mostyn J on 9 th October 2017.


The judge's award was based on the application of the sharing principle and neither party questions its determinative role in this case. It is the manner in which the judge applied this principle in the particular circumstances of this case which is being challenged. The two features around which the arguments revolve are (i) that the bulk of the current wealth comprises shares in a private trading company; and (ii) that this company was founded by the husband prior to the commencement of the parties' relationship. The context, in summary, is that the company was first incorporated in 1978, some eight years before the parties began living together, and that the current value of the company represents a very significant part of the parties' wealth.


The wife advances three grounds of appeal:

(a) that, when determining what part of the current value of the company was marital wealth, the judge wrongly applied a straight line apportionment from the date of its incorporation;

(b) that, in that exercise, the judge wrongly disregarded the fact that, when the parties started living together, the husband only owned half of the company; and

(c) that the judge was wrong not to provide a mechanism for the realisation of the shares in the company which formed part of the wife's award.


The husband cross-appeals. The Respondent's Notice is somewhat diffuse but, essentially, the husband advances two grounds of appeal:

(a) that the judge wrongly treated the value he ascribed to the company as equivalent to cash and, as a result, awarded the wife an unfair proportion of the non-risk assets; and

(b) that the judge was wrong to order £20 million of the lump sum award to be paid to the wife within two years.

The husband, additionally, seeks to uphold some aspects of the judge's decision challenged by the wife on other grounds.


The issues of principle raised by the appeal and cross-appeal relate, as referred to above, to the manner in which the court applies the sharing principle. They can be summarised as follows:

(a) What approach should the court take to the valuation of shares in a private company when determining how to divide the marital wealth; and

(b) What approach should the court take when determining what part of the parties' current wealth is properly to be defined as non-marital in circumstances where that wealth includes shares in a private company which was founded by a spouse prior to the date when the parties married or started living together.

I have defined the second issue quite narrowly because the decisions in this court of Hart v Hart [2018] Fam 93 and Versteegh v Versteegh [2018] EWCA Civ 1050 contain extensive consideration of the application of the sharing principle in the context of non-marital wealth.


The judge's approach to issue 5(a) was, in summary as follows.


He found the net capital assets held by the parties to be worth £182 million, comprising: (i) properties (substantially residential) and pension funds valued at approximately £21 million; and (ii) 100% of the shares in a private company, Dextra Group Plc (“Dextra”). This was based on his determination that the “present value” of Dextra was £221 million before tax and costs of sale. He used this as a hard figure in the sense that he did not differentiate between its value and the value of the other assets including, in particular, cash (comprising, largely, a net dividend of £49.5 million to be paid by the company). He adopted this approach because he considered that “the only difference between it (i.e. the company) and its cash proceeds is … the sound of the auctioneer's hammer”. Accordingly, he calculated his award on the basis, subject to issue (b), that the wife should receive half of the net value of the assets including the value of the company.


The principal issue raised by this case is, therefore, whether the judge was right to take the valuation of the company as equivalent to cash.


The judge's approach to issue 5(b) was, in summary, as follows.


The judge decided that only 80% of the value of Dextra was marital property. He arrived at this percentage by applying a straight line apportionment to the value of £221 million from the date when the business was first incorporated, in its initial form (July 1978), to the date of the hearing. He did not, therefore, seek in any way to base this determination on the value given by the single joint expert for the company at the start of the parties' relationship (July 1986). The judge's approach led him to conclude that £177 million of the present value of Dextra represented marital property.


The second specific issue in this case is, therefore, whether the judge was right to adopt this approach when deciding which part of the value of the Dextra should be treated as marital property for the purposes of the application of the sharing principle.


The effect of the judge's approach was that the marital wealth totalled, net of taxes and costs of realisation, £146 million. He awarded the wife half of this. His assessment of the total wealth was in part based on Dextra declaring a dividend of £80 million gross (£49.5 million net) of which £50 million could be paid “immediately” with the balance being “deferred”.


Based on the above, the judge awarded the wife assets of £13.7 million (from those referred to in 7(i) above), a lump sum of £40 million (with £20 million being payable by June 2017 and £20 million by June 2019) and 17.5% of the shares in Dextra (being equal to £19.2 million). Together these totalled £72.8 million or 40% of the total wealth of £182 million. The wife's shares in Dextra would represent 26% of her assets with her non-business assets totalling £53.7 million.


On the above figures, the husband would have total wealth of £109 million (60% of the total), of which his shares in Dextra would represent £90.6 million, or 83% of his wealth, with other assets of £18.4 million.


In summary, the wife challenges the straight line apportionment used by the judge to determine the marital element of the present value of Dextra. Her case is that this determination should have been based on the expert's valuation for the company as at July 1986. It is also submitted that the judge's approach ignored the fact that the husband only owned half the company when the parties began living together.


In summary, the husband challenges the division effected by the order as giving the wife too much of, what are sometimes described in this field as, the “copper-bottomed” assets while leaving him with an unfair proportion of the “illiquid and risk-laden assets”: see Wells v Wells [2002] 2 FLR 97 at [24]. This, it was submitted, derived from the judge's flawed treatment of the expert's valuation for the current value of the company. The judge should have treated this as “insecure” and the shares as a “risk” and “illiquid” asset and not as equivalent to cash or the other marital assets.


The husband also challenges the obligation imposed on him to pay the second sum of £20 million by June 2019. It is his case that there was no evidential foundation for the judge determining that this could be funded by Dextra paying a dividend by that date, this being the only potential source of the required funds.


I note, in passing, that the order is expressed as being for “non-variable lump sums”. This might suggest that the order provides for two lump sums rather than one lump sum payable by instalments. However, in his written submissions Mr Pointer asserts that the order is for a lump sum by instalments and the judge has apparently made clear that he would entertain an application for an extension of time. Although it does not, therefore, arise in this case, I would draw attention to what Baron J said, when sitting in the Court of Appeal, in Hamilton v Hamilton [2014] 1 FLR 55 at [47], about the utility of including a recital in an order “in terms of a potential variation (which) would put disputes … beyond doubt”.


Finally, by way of introduction, one issue which might arise is whether this court is able to determine what substantive award should be made or whether there would have to be a rehearing. Clearly, given the time and costs which have already been expended on this litigation, the former is much to be preferred. Whether this can be achieved depends, of course, on whether this court is able to determine what award would be fair in the light of its conclusions on the issues referred to above. The husband, in particular, does not seek a rehearing.



The background facts are set out in Mostyn J's judgment, WM v HM [2017] EWFC 25. I propose, therefore, to set out only a brief summary.


At the date of the hearing below the husband was aged 68 and the wife 54. They began living together in 1986, when the husband was 37 and the wife 24. They married in 1989 and separated in 2015. They have two, now adult, children.


In 1978 the husband and a friend started a business which ultimately...

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