VV v VV
| Jurisdiction | England & Wales |
| Judge | Mr Justice Peel |
| Judgment Date | 13 May 2022 |
| Neutral Citation | [2022] EWFC 41 |
| Docket Number | Case No: TA20J00001 |
| Court | Family Court |
[2022] EWFC 41
Mr Justice Peel
Case No: TA20J00001
IN THE FAMILY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Brent Molyneux QC and Petra Teacher (instructed by Sears Tooth Solicitors) for the Applicant
Justin Warshaw QC and Kyra Cornwall (instructed by Michelmores LLP) for the Respondent
Hearing dates: 17–23 March 2022
Approved Judgment
Introduction
The parties were married for no more than about 5 months, and have no children. They are both in their fifties. Such cases should be easy to resolve. Not so here; the parties have litigated bitterly, at enormous cost and in minute forensic detail for over a year and a half. The principal issues in these financial remedy proceedings are:
i) The extent of pre-marital cohabitation.
ii) Linked to (i), the extent to which the sharing principle applies to H's assets.
iii) Whether H is guilty of misconduct in having sold part of his entitlement to units in a company prior to their release to him, and having concealed the same from W and the court.
iv) Whether W is guilty of misconduct, in having prevented the release to H of his units in the company at the opening of the official market in such units.
v) W's needs.
The wide range of issues is reflected in the parties' legal costs:
i) W's costs are £619,000, of which £237,000 is unpaid.
ii) H's costs are £616,000, of which £5,000 is unpaid.
I am very grateful to counsel whose mastery of the detail has been impressive, and who have navigated me through the issues clearly, arguing their respective cases expertly.
The evidence
The written evidence in this case is vast. The bundles consist of over 5000 pages, including numerous narrative statements which (particularly in W's case) are exhaustively detailed.
I heard from H and W. H was moderate and essentially honest in his evidence. He accepted, as he had to, that he been guilty of non-disclosure of pre-listing unit sales during the proceedings, for which he gave certain explanations. He was generally clear and composed, only showing a flash of anger when saying, as he sees it, that W's conduct has caused him huge financial loss. W was rather less satisfactory. She had a tendency not to answer the question, heading off on tangents, and was clearly irritated by the lines of questioning. Her mistrust of H, who she considers to have betrayed her, was almost palpable. She is charming and articulate, but at times she was a little histrionic. None of this is to say that she was deliberately dishonest. But I felt that she embellished or exaggerated so as to put a more persuasive slant on her case. Where there was a direct conflict of evidence, I preferred H's account.
I sensed also that H and W had very different perceptions of events and conversations. They are polar opposite personalities; the one logical, the other creative and artistic. Their perspectives of the sweep of their relationship did not align. It is my task to determine, objectively, where the facts lie.
Proposals
The parties' respective proposals are as follows:
i) H offers a lump sum of £400,000 on a clean break basis but, given the sums of money already advanced by him to W for legal fees on account of the said sum, his proposal is in effect nil.
ii) W seeks 50% of the remaining units and the proceeds of sale of units to date. That is over £6m gross, less any tax payable.
The background
H and W are 57 years old. H is a citizen of the United States, currently living on the West Coast of the United States. W is of Scandinavian origin, living in London. They did not have children together.
H has degrees in electrical engineering, computer science and mathematics. His career has been spent in the software industry. He has, I am satisfied, a significant reputation in the sector. W is a classically trained musician and composer of considerable repute. She has had a wide-ranging international career. In recent years she has transitioned from performing to composing and arranging.
They met on a Eurostar train in March 2018 and their relationship developed, although H was living in the USA and W in the UK. W says they started cohabiting in November 2018, H says it was December 2019. I shall return to this aspect in more detail.
On 11 July 2018, H contacted a former colleague who was working at AB Company, a start-up specialising in the use and application of digital technology. H was introduced to the senior leadership and in due course offered a position there. His role was to build and operate the research and engineering team, operating between the West Coast of America and Europe. He had an alternative offer in the same sector but elected to join AB Company, opting for the potential upside (but also greater risk) of equity in the new business ahead of the well paid security of the alternative role.
I am quite sure that H secured the job because of his long experience, proven track record and knowledge of the tech industry. It seems to me, contrary to W's presentation, that her involvement in H's decision to join AB Company was minimal; little more than general encouragement during a relationship which was at a relatively early stage and, on any view, had not progressed to cohabitation. By the time H accepted the job in August 2018, they had only met over a handful of days in March 2018, and for a weekend in Switzerland in June 2018. W had minimal knowledge or understanding of the tech world. The contemporaneous messages show W being supportive but not particularly engaged or involved in the process: “Well I hope you get the job you want,” and “Hope it all works out the way you want it to” are examples. I accept H's evidence that they talked about his job options, but not at great length. W sets some store by her role in introducing H to a relative of hers who worked in an unrelated part of the technology sector. He did not seem to me, from what I heard, to have had particularly relevant credentials. Their telephone conversation on 21 July 2018 lasted 10 minutes according to H, or 30 minutes according to what W was told; either way, I accept that it had no bearing on H joining AB Company. W, who did not participate in the call, seemed to me to exaggerate its importance. I find that H's decision to start employment at AB Company was his alone, and not a joint one; he did all the research and had all the experience in that field. He weighed up the advantages and disadvantages with little or no reliance upon W's views. This was not a joint decision, but a unilateral one.
On 12 August 2018, H was formally offered employment at AB Company. On 15 August 2018, H signed a contract with AB Company and started working there on 4 September 2018. His base salary was $400,000pa gross. He was awarded the right to acquire 600,000 units in the company, subject to working at AB Company for a period of 1 year, and vesting over 4 years. The units were required to be valued professionally for the purpose of his employment contract; the attributed valued was $0.42 per unit. The nature of the business lent itself to the prospect of very substantial value, if successfully listed, but equally the risk of complete failure. On 15 February 2019, H became entitled to the right to acquire 1.6 million units (subject to the 1 year service period backdated to August 2018, and the 4 year vesting period), including the original 600,000, to reflect the fact that his role was significantly greater than originally envisaged; again, the value was specified in the employment contract.
H sold his home and moved into rented accommodation at Flat H local to the AB Company offices in August 2018, before moving locally to Flat F (also rented) in June 2019. He continued to live in the USA until December 2019.
On 22 March 2019, H and W became engaged in Italy, H having asked W's father for permission to marry her over Christmas 2018. H bought W an engagement ring for £125,000.
After approximately a year at AB Company, H says that the founder became envious of H's status in the company and with key investors. He began to restrict H's role. In an agreement reached in September 2019, it was decided that H would leave. I have no reason to doubt H's evidence that his departure was generally amicable, despite W's suggestion to the contrary.
On 22 October 2019, a separation agreement for H's departure was reached under which he was entitled to acquire 700,000 units upon the start-up listing; fewer than the 1.6m to which he was entitled under his contracts, but not subject to vesting periods. The listing date had not by then been set.
On 8 November 2019, H's employment with AB Company formally came to an end.
From November 2019 to August 2020, H unsuccessfully attempted to develop his own start-up venture with a partner. In August 2020, he joined another tech company as a senior director where he has remained ever since.
In December 2019, the parties moved into a property in Kensington, London. H relinquished his tenancy in the USA. W moved out of her London flat. On 25 January 2020, they married in London. The marriage became fraught almost immediately, although I am satisfied that it did not finally end until June 2020. Thus, the total period of cohabitation and marriage was no more than about 7 months (December 2019 to June 2020), according to H, or 19 months (November 2018 to June 2020), according to W. The significance of the timespan is that during the period of cohabitation asserted by W, H was working at AB Company and earning the right to acquire units in the company. Thus, she says, some or all of the units became matrimonial in nature.
I accept that in general terms, during and after H's employment with AB Company, he did not know, and could not know, what the value of the business, and his units, would become. As he...
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