Divorce – Financial Provision
In the case of JB v. MB, the Husband and Wife commenced cohabitation in 1990 and subsequently married in 1997.
The parties separated in 2007.
There were two children of the marriage.
In 1989, the Husband, who was a systems analyst by trade, and two other shareholders, set up an enterprise, which was ultimately known as Z Ltd. The company became modestly successful, allowing the Husband to provide a comfortable standard of living for his family.
At the time of separation, the company had a turner of £1.8 million, with a profit of £477,000.00.
The Husband had an annual income of £100,000.00.
When the parties divorced, the Wife did not take any steps to pursue a claim for financial relief against the Husband.
The Husband issued an application in Form A in December 2013, which was over two years after the divorce petition had been issued.
The matter proceeds in the local County Court, before being transferred to the High Court.
The Husband’s shareholding in Z Ltd was considered to fall outside the matrimonial assets, given his post separation efforts and occasional inspiration had added significant value to the shares which were originally held by him at the time of separation.
The main issue in this case was to determine the appropriate level of matrimonial assets, given the significant gap between the Husband and the Wife.
The Court ruled that it was established law that those assets which had been in place at the point of separation remained matrimonial property. However, the increase in value achieved following separation, might be divided unequally.
It was confirmed that in usually cases passive and active growth is to be shared equally.
However, it stated that there are cases where growth which occurred post separation would be considered non matrimonial and should not be shares, given it related truly to a new venture and had no connection to the marital partnership.
The Court found that the significant increase in the Husband’s shareholding was due to his post separation endeavour. Therefore, it was considered that the award to the Wife should reflect this position.
On the evidence, it was clear that more than half of the current value of the shares had been attributable to later effort by the Husband. Therefore, the Wife’s share of the current value of the Husband’s shares was to be expressed as 20% of the whole shareholding. This was on the basis that 60% of the value of the Husband’s shareholding was accrued post separation and the remaining 40% was a matrimonial assets, which was to be shared equally.
The Wife’s share was worth £1.59 million, which was 25% of the matrimonial pot.
If you need assistance in respect of your matrimonial affairs, whether this is in respect of issues concerning a divorce and the related financial aspects, children, injunctions or cohabitation disputes, please contact our offices on 01323 727321 to arrange an appointment.
Please note that the family department offer a free initial 30 minute interview to provide general advice and guidance in relation to your matter.