G v T

In financial remedy proceedings, a private-company valuation is an evaluative aid to achieving fairness, not an exercise in mathematical precision. The court may adopt the safest and most reliable available valuation while recognising its fragility and the difference between an opinion-based value and cash.

The court must assess the weight given to the valuation and balance risks of illiquidity, future growth and decline. Post-separation growth in a matrimonial business remains relevant where it continues the marital venture. A genuinely new venture, unconnected with the marital partnership, will ordinarily be treated differently. The court may select a valuation date and payment structure that fairly reflects marital endeavour and promotes a clean break.

This was a final hearing of an application for financial remedies following divorce proceedings. The parties’ substantial assets included the husband’s shareholding in a private proprietary trading and market-making company.

The principal disputes concerned the value of that shareholding, the valuation date, post-separation growth, liquidity and the structure and timing of the wife’s award. The court also determined issues concerning other assets, interest and child maintenance.

1. Outcome. The court applied the sharing principle to a matrimonial asset base of £39.662m. The wife’s entitlement was assessed at £19.831m, with £16,787,595 payable by staged lump sums: £2,787,595 by 1 September 2020, £5m by 1 September 2021, £5m by 1 September 2022 and £4m by 1 September 2023. Interest on outstanding payments, absent default, was set at 3.75% from 1 May 2020. Child maintenance was fixed at £35,000 per child per year.
2. The court accepted the single joint expert’s net asset value methodology as the safest and most reliable available valuation. A price-to-book approach involving a premium over net asset value was rejected. Future profitability and any marketplace premium were too uncertain.
3. The court held that the husband had not shown that the post-separation accrual up to June 2018 was a truly new venture unconnected with the marital partnership. The company’s profits arose from the business and personnel developed during the marriage. The wife’s equal interest was therefore valued by reference to June 2018. Growth after that date was treated as beyond marital endeavour because the husband had made significant interventions and the business had materially changed.
4. The payment structure balanced the wife’s entitlement to a secure result and clean break against the husband’s liquidity constraints and the company’s restricted internal share market. No acceleration or ratchet clause was included. The husband was required to give reasonable notice of anticipated liquidity from share sales, bonuses, dividends or a sale of the business.