B v B

In financial relief proceedings, current market value and finality are important considerations, but neither imposes an inflexible rule. Where shares cannot be transferred and their future value may reflect both matrimonial resources and post-separation endeavour, the court may defer division until realisation and allocate the proceeds by percentage. The court must balance the risk of unfairness from fixing a present lump sum against the disadvantages of continuing financial ties. The division is a discretionary judgment based on all the section 25 factors and the particular circumstances. An appellate court should interfere only where the first-instance decision is shown to be wrong.

The husband appealed, with permission, against an order made by District Judge Robinson on 19 May 2014 in financial relief proceedings. The order required him to pay the wife specified proportions of the net proceeds when certain non-transferable shares and loan notes were realised.

The appeal initially concerned both assets. The loan-note issue was abandoned after most of the notes were redeemed and the wife received her share. The remaining issue was whether the shares should be dealt with by a present lump sum, as the husband proposed, or by deferred sharing of the realised proceeds. The central questions were whether the District Judge had wrongly departed from current valuation and finality principles, and whether the 40 per cent allocation to the wife was permissible.

1. Appeal dismissed. The husband had not shown that District Judge Robinson’s decision was wrong.
2. The usual preference for current valuation and financial closure is not a rule or strait-jacket. The inability to transfer the shares was an unusual feature which the District Judge was entitled to take into account. A deferred lump-sum mechanism based on the eventual realisation was therefore permissible.
3. The approach in FZ v SZ and Another [2011] 1 FLR 64 did not require current valuation in every case. It provided general guidance, subject to the discretionary balancing of the section 25 factors and the facts of the particular case.
4. The District Judge had not misunderstood Evans v Evans [2013] 2 FLR 999. That decision illustrated the relevance of post-separation endeavour to the eventual value of an asset, while leaving the methodology fact-sensitive. The District Judge properly recognised the factual differences.
5. The reasoning in B v B [2013] EWHC 1232 (Fam) provided helpful guidance. Fairness may require recognition of both the matrimonial contribution to an asset and the post-separation work contributing to its later value. There was no scientific method for quantifying that contribution. The 40 per cent allocation was a discretionary judgment which could not be criticised as legally impermissible.
6. The District Judge was entitled to conclude that the risk of serious unfairness to the wife from fixing a lump sum immediately outweighed the disadvantages of continuing financial linkage. Appellate review required caution because the first-instance judge had seen the evidence and assessed the case in the round.

• High Court (Family Division): The appeal from District Judge Robinson’s order dated 19 May 2014 was dismissed. The loan-note aspect had been abandoned after redemption of most of the notes.