Versteegh v Versteegh

This appeal concerned financial remedy orders following a long marriage in which the parties had entered a Swedish pre-marital agreement (PMA). The Court of Appeal upheld the judge’s approach that the PMA should be given significant weight because the wife had a full appreciation of its implications, and that the judge was entitled to give a broadly unequal outcome reflecting the PMA, significant non‑matrimonial contributions by the husband and the realities of the business structure. The court also endorsed the judge’s conclusion that reliable valuations and a probability‑based assessment of future liquidity for the principal business asset (H Holdings) could not be reached, and that, in those circumstances, it was within the judge’s discretion to make a Wells order transferring ordinary shares to the wife rather than determining a specified cash lump sum.

Key legal principles applied were Radmacher v Granatino on the weight to be accorded to nuptial agreements; the exercise of the section 25 discretion under the Matrimonial Causes Act 1973 (including consideration of s.25A's clean break duty); the treatment of non‑matrimonial assets (comparison of arithmetic and impressionistic approaches, with reliance on Miller/McFarlane and subsequent guidance); and Wells v Wells on sharing orders in respect of illiquid or unvalued business interests. The appeal was dismissed.

Background and procedural posture: This is an appeal from Sir Peter Singer’s Family Division order of 30 January 2017 awarding the wife approximately half the non‑business assets (about £51.4m) together with a 23.41% interest in H Holdings, a complex trust/ company group dominated by long‑term property development projects. The wife appealed, challenging the judge’s treatment of the PMA, non‑matrimonial assets, valuation/liquidity of H Holdings and the decision to make a Wells order.

Nature of the application/relief sought: The wife sought a rehearing of the financial remedy issues and, in effect, a cash settlement substantially larger than the award the judge made (her experts had proposed a sharing outcome worth c. £116m to her on her valuation; she had also sought a lump sum extraction plan of c. £67m payable over a number of years).

Issues framed by the court:

• Whether the Swedish PMA should be given decisive weight or disregarded because the wife had not received independent legal advice and lacked a full appreciation of its implications;
• How to treat and quantify non‑matrimonial assets: arithmetic deduction versus an impressionistic/discretionary approach;
• Whether the judge was obliged to fix a conservative valuation and liquidity profile for H Holdings or whether, given the fragility of expert valuation evidence, he was entitled to conclude that valuation and future liquidity could not be reliably determined;
• Whether making a Wells sharing order (transferring ordinary shares in specie) was lawful and within the judge’s discretion, and whether that outcome was compatible with the court’s duty under s.25A to consider clean break.

Court’s reasoning and conclusions: The Court of Appeal (King LJ, Holroyde LJ and Lewison LJ) endorsed the judge’s primary findings of fact, including that the wife understood the PMA when she signed it, and that she had acted in the marriage to ameliorate its effects. The court rejected submissions that absence of legal advice in Sweden made the PMA ineffective here, noting Radmacher’s guidance that legal advice is desirable but not essential where the party clearly appreciated the implications. On non‑matrimonial assets the court accepted the judge’s discretionary, impressionistic approach in circumstances where valuation of the business assets was unreliable. The court accepted the judge’s careful analysis and his finding that expert evidence did not supply a probability‑based assessment of value or liquidity for the major development projects; small changes in key variables produced large swings in value. Given that incapacity to value the business was established and that the wife received significant liquid assets exceeding her needs, the Court of Appeal held that the judge was within his discretion to make a Wells order transferring ordinary shares to the wife rather than fixing a cash figure or imposing preference shares at a value he could not reliably determine. The appeal was dismissed.

Appeal dismissed. The Court of Appeal held that (i) the judge was entitled to give significant weight to the Swedish PMA because he found the wife had a full appreciation of its implications; (ii) the judge was entitled, in the exercise of his section 25 discretion, to treat non‑matrimonial contributions in an impressionistic/discretionary fashion given the inability to reach reliable valuations; (iii) the judge was justified in concluding he could not reach a reliable value or probability‑based liquidity assessment for H Holdings; and (iv) in those circumstances the making of a Wells order transferring ordinary shares in specie was within the judge’s lawful discretion.

This is an appeal to the Court of Appeal (Civil Division) [2018] EWCA Civ 1050 from the Family Division (Sir Peter Singer) ZC14D01200. The judgment under appeal was handed down by Sir Peter Singer on 30 January 2017 in the High Court, Family Division.