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England and Wales Family Court Decisions (High Court Judges) |
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You are here: BAILII >> Databases >> England and Wales Family Court Decisions (High Court Judges) >> DR v UG [2023] EWFC 68 (05 April 2023) URL: http://www.bailii.org/ew/cases/EWFC/HCJ/2023/68.html Cite as: [2023] EWFC 68 |
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IMPORTANT NOTICE
This judgment was delivered in private. The judge has given leave for this version of the judgment to be published. The parties and their children must not be identified by name or location, other than as set out in this version of the judgment. Their anonymity must be strictly preserved. All persons, including representatives of the media, must ensure that this condition is strictly complied with. Failure to do so will be a contempt of court.
Neutral Citation Number: [2023] EWFC 68
Case No: BV20D11362
IN THE FAMILY COURT
The Royal Courts of Justice
Strand
London
WC2A 2LL
Date: 5 April 2023
Before :
Mr Justice Moor
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Between :
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DR |
Applicant |
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-and-
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UG |
Respondent |
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Mr Lewis Marks KC and Mr Marcus Lazarides (instructed by Charles Russell Speechlys LLP) for the Applicant
Mr Tim Bishop KC and Mr Richard Sear (instructed by Stewarts Law LLP) for the Respondent
Hearing dates: 28th to 30th March 2023
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JUDGMENT
MR JUSTICE MOOR:-
The relevant history
The breakdown of the marriage
The relevant litigation
Open Proposals
Section 25 statement
Supporting witness statements
The schedule of assets
The parties' respective Position Statements
The law I have to apply
(a) The income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future, including in the case of earning capacity, any increase in that capacity which it would in the opinion of the court be reasonable to expect a party to the marriage to take steps to acquire;
(b) The financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future;
(c) The standard of living enjoyed by the family before the breakdown of the marriage;
(d) The age of each party to the marriage and the duration of the marriage;
(e) Any physical or mental disability of either of the parties to the marriage;
(f) The contributions which each of the parties has made or is likely in the foreseeable future to make to the welfare of the family, including any contribution by looking after the home or caring for the family;
(g) The conduct of each of the parties, if that conduct is such that it would in the opinion of the court be inequitable to disregard it; and
(h) The value to each of the parties to the marriage of any benefit which, by reason of the dissolution ... of the marriage, that party will lose the chance of acquiring.
45. The overall requirement in applying section 25 is to achieve fairness. It was made clear in the seminal House of Lords decision of White v White [2000] UKHL 54; [2001] 1 AC 596 that there is to be no discrimination in financial remedy cases between a husband and wife. This was expanded upon in K v L [2012] 1 WLR 306, CA when Wilson LJ reiterated at [15]:-
"what is unacceptable is discrimination in the division of labour within the family, in particular between the party who earns the income and the party whose works is in the home, unpaid."
46. He went on to say that it is the essence of the judicial function to discriminate between different sets of facts and thus between different claims. I have to say that I prefer use of the word "differentiate" to "discriminate" but it is clear what he meant.
47. In the case of Miller/McFarlane [2006] UKHL 24; [2006] 2 AC 618, the House of Lords identified three principles that should guide the court in trying to achieve fairness, namely:-
(a) The sharing of matrimonial property generated by the parties during their marital partnership;
(b) Compensation for relationship generated disadvantage; and
(c) Needs balanced against ability to pay.
48. It is absolutely clear that, in this particular case, there is no need at all to consider either compensation for relationship generated disadvantage or the parties' respective needs. Any award under either head will be insignificant compared to the respective entitlements under the sharing head. I need, therefore, merely to consider the law in relation to the two reasons that the Husband says justify a departure from equality in his favour, namely special contribution and post-separation endeavour.
49. Dealing first with special contribution, I accept that the concept does still exist and that it is likely to continue to do so until the Supreme Court says otherwise (see the Court of Appeal in Work v Gray [2017] 2 FLR 1297). The availability of the concept has, however, been significantly circumscribed over the years. Three elements are necessary. These are taken from paragraph [140] of the judgment of Holman J at first instance but approved in this form in the Court of Appeal:-
"(a) The characteristics or circumstances which would result in a departure from equality have to be of a wholly exceptional nature such that it would very obviously be inconsistent with the objective of achieving fairness for them to be ignored;
(b) Only if there is such a disparity in the respective contributions of the parties to the welfare of the family that it would be inequitable to disregard it should this be taken into account in determining their shares (thus if the court completely fails to undertake a comparative evaluation of each party's respective contribution [as Baker J failed to do in XW v XH [2020] 1 FLR 1015], a finding of special contribution will be flawed); and
(c) The amount of the wealth alone may be so extraordinary as to make it easy for the party who generated it to claim an exceptional and individual quality which deserves special treatment. Often, however, he or she will need independently to establish such a quality, whether by genius in business or some other field. A windfall is not enough."
50. The second potential ground that is said, by the Husband, to justify departure from equality in this case is to be found in the concept of post-separation endeavour. There have been numerous authorities that have touched on this concept and it would not be remotely proportionate to review them all. Again, I accept that the courts have recognised that wealth generated after separation may not be regarded as the fruits of the marital partnership, thus justifying a departure from equality. One such example was identified by Mostyn J in JL v SL (No 2) [2015] 1 FLR 1202 where he said at [42]:-
"On the other hand there will be cases where the post-separation accrual relates to a truly new venture which has no connection to the marital partnership or to the assets of the partnership. In such a case the post-separation accrual should be designated as non-matrimonial property and save in a very rare case should not be shared."
51. I further accept that it is possible to extend this concept to a company that has simply grown and prospered since the date of the separation. Mr Bishop refers me to the decision of Moylan J in SK v WL [2011] 1 FLR 1471, where the award was 40% to reflect three years' post-separation endeavour even though the business was the same business and merely grew conventionally. I do consider this to be somewhat of an outlier, particularly as it was a case where the husband had managed to lose a substantial portion of the proceeds of sale of the business. It is not binding upon me. Indeed, I am of the view that, twelve years later, it would not be decided in the same way. There has to be something that removes a case from the principle first espoused by the Court of Appeal in Cowan v Cowan [2001] 2 FLR 192 at [70] where Thorpe LJ said:-
"In this case, the reality is that the husband traded his wife's unascertained share as well as his own between separation and trial, particularly committing those undivided shares to the investment in Baco. The wife's share went on risk and she is plainly entitled to what in the event has proved to be a substantial profit."
52. Mr Marks postulates a number of circumstances where it will be possible to establish post-separation endeavour. He identifies cases where there is still more to do after the date of the trial to harvest the asset (eg Evans v Evans [2013 2 FLR 999); cases where there has been a long and unjustified delay in bringing the application (eg S v S [2007] 1 FLR 2120); earn-outs or lock-ins (eg where the payer has to continue to work in the business in the future, despite the sale); truly new ventures, created, he submits, without the use of matrimonial assets; or where the payee has already been bought out, at a fair price, from the asset that has subsequently increased in value. I am certainly not prepared to accept that this is an exhaustive list but it does answer the point made by Mr Bishop that, to ignore post-separation endeavour, would fall foul of the requirement in section 25 to consider the parties' respective contributions. I am further not convinced that the "truly new venture" needs to be created without the use of matrimonial assets. It will depend on the circumstances, although the assets used may be a relevant consideration as to whether the circumstance justifies departure from equality.
53. My attention was drawn to a decision of my own, CO v YZ [2020] EWFC 62 where I said at [54]:-
"In general, post-separation endeavour is relied on to argue for a greater share of an increased value of the assets. I have always had real reservations as to the concept for the reason that, if the assets have fallen in value, it is difficult to see why the other party should not then argue that he or she should not have to share in that fall in value. Such difficulties are avoided if the concept is severely restricted in its operation. It is, of course, a very different matter if there has been a significant delay in bringing the application, such as in Wyatt v Vince, but that is not the case here. Just as the Husband has continued to run his businesses, so the Wife has continued her contribution in caring for the four children. Moreover, she can say with some force that he has been trading her undivided share. In this particular case, I will also have to consider the very significant losses that the Husband has incurred in other business ventures since separation that the Wife had no involvement in, or even, initially, knew about."
54. Mr Bishop relied on Cooper-Hohn v Hohn [2015] 1 FLR 745 as another example of post-separation accrual reducing the award but Mr Marks points out that, at [184], Roberts J found that the composition of the portfolio at the date of the trial was very substantially different in terms of its makeup from its composition at the date of separation. At [185], she considered the argument that he had just been trading a vehicle that dated from the marriage, but rejected it on the basis that it was the Husband's investment eye and ability to drive change that had achieved profit demonstrably in excess of normal returns and to ignore that would, in effect, be sharing his earning capacity after the date of the marriage. Whilst I can see arguments both ways, I am clear that I will be able to deal with this case on the basis of the principles set out previously, without undue reliance on Cooper-Hohn v Hohn.
55. There are a few further matters I must mention. The first is a potential language barrier. English is not the first language of either party. I accept that both speak it excellently, but there were times in the evidence of both when I had some trouble understanding what they were saying and had to ask for the evidence to be repeated. I must, therefore, take great care in assessing their evidence, as processing information provided in a foreign language may put the participant at a disadvantage. I must guard against the very real possibility that questions or answers or both are misunderstood or, at the least, nuances and shades of different meaning are lost in the process. I have taken all this into account in assessing the evidence in this case.
56. I have decided that I should give myself a Lucas direction. There are issues in the case as to the extent to which the parties have lied to this court or, at the very least, been economical with the truth. First, I must decide the extent of any lies. If I find that there have been lies, I have to ask myself why the person concerned lied. The mere fact that a witness tells a lie is not in itself evidence that other matters asserted against that witness are true. A witness may lie for many reasons. They may possibly be "innocent" ones. For example, they may be lies to bolster a true case; or to protect someone else; or to conceal some other disreputable conduct; or out of panic, distress or confusion. It follows that, if I find that a witness has lied, I must assess whether there is an "innocent" explanation for those lies. However, if I am satisfied that there is no such explanation, I can take the lies into account in my overall assessment of the facts of the case and the truth of the various allegations raised.
57. Finally, Mr Marks asks why Mr S, the CEO of the trading company after the Husband, has not been called to give evidence. It is, of course, entirely a matter for the Husband as to what evidence he calls but Mr Marks draws my attention to the decision in British Railways Board v Herrington [1972] AC 877 to the effect that a court can draw inferences from the failure to call evidence that a party might have been expected to adduce. As it has transpired, I have not found it necessary to draw an inference against the Husband in this regard and I do not do so.
The evidence that I heard
58. By the standards of these cases, the oral evidence was brief and concise. In opening, Mr Marks submitted that the case could have been dealt with on submissions but I take the view that he was not right about that, given that I have to make findings as to the Husband's case as to post-separation endeavour. The Wife gave evidence first. She told Mr Marks that her Husband was a really good salesman. She said he thinks creatively and is very persistent and very persuasive. She was asked about the investment in the trading company and she insisted that she had been told that everything was on the line. I accept that is what she was told. She thought the stock options that he did have could only be cashed in at certain times and not in December 2017, which I am sure was correct. She said that the investment in the trading company did make her nervous as all their eggs were in one basket. She said that the thought of losing your family home was worrying, particularly as they had three children. She added that she did trust him though. She said she only became aware of the much higher value of the business when her solicitors received the email from H's brother in May 2022 but she was not surprised by the price as the £600 million figure had previously been mentioned as the aspiration for value in 2025. She was, however, surprised by the fact that a couple of months earlier, she had been told she would have to apply for benefit as everything was about to be lost. This fear of losing everything had made her extremely worried as she did not know how she would support the children. I accept all this evidence.
59. Mr Bishop then cross-examined her. She denied that the parties had enjoyed a relatively modest standard of living during the marriage, saying that the standard was not modest by Danish standards. She accepted that the majority of the marriage had been spent living in Denmark, other than 18 months in Austria, two and a half years in a provincial city in England and the time in London at the end of the marriage. She said that she moved because the Husband's job required it. She stressed that the burdens on her were higher as the Husband spent more than 100 days each year away travelling. She acknowledged that the MBO was an exciting possibility and that they were both enthusiastic. The risk was for the children. She was pretty sure the company cost DKK 5 million, which the Husband had said in his earlier statements and Form E. I accept that is what he said, but I find that the total price was actually DKK 4 million and his share was DKK 2.8 million. She added that they had raised more than £310,000 and she was told it would have ruined the family if the trading company failed, as they had nothing else. I am sure that is what she believed. If they did have other money, she did not understand why the Husband cashed in his pension and paid 60% tax to do so. She said she did not know what he would have done if she had not supported it. He would, of course, have been unable to obtain the mortgage without her agreement and, on the balance of probabilities, I find that he needed that mortgage. I cannot see why he would have taken it out if that had not been the case. Moreover, it meant that the family home was in jeopardy if his income ended.
60. Mr Bishop turned to the issue of batch contamination. She said she had discussed the severity of this risk with the Husband. She was adamant that she had not been told that there was £5 million outside the company at the time of the batch failures. I accept that evidence. She said she did not have access to his bank statements and there was nothing to indicate that amount of capital in his first Form E. He had just told her they had nothing; that they would be going bankrupt; and she would have to apply to the Municipal for benefits. I accept all that evidence. She said she had no information about specialised therapy. Whilst she said she could not contradict what he was saying, she did wonder why Mr S was not giving evidence for him. Mr S still works for the trading company. The Husband had stepped down in 2020 but, even in 2019, he had reduced his working days to three per week. Thereafter, he worked one day per week. I am absolutely clear that the Wife was a truthful witness, doing the very best she could to assist me.
61. The Husband then gave evidence. In answer to questions from Mr Bishop, he told me that, during the marriage, they did talk about his job but the Wife was not a sounding board. He would talk but would not get dialogue back. I am minded to accept this but it makes no difference to the case. When the MBO took place, he told the Wife and X Co that the only way the business could survive would be to sack 1/3rd of the employees. He said that he bought nearly 70% of the shares and paid DKK 2.8 million. He did not accept that Mr S was doing most of the work once he became CEO, but I am clear that he cannot be right about that, particularly as he was ill for quite a bit of the relevant period. He said that there were three strands to his work for the business. The first was what he described as "strategic/visionary". The second was building good people into the organisation. The third was to undertake major negotiations. He said that, after he resigned as CEO, he was still doing between 5 and 40 hours per week. He was heavily involved if a major decision had to be taken. At the time of the MBO, there was very little specialised therapy work done in the trading company, although it may be of significance that there was some. He said that they were asked for samples by customers and they just handed them over in the hope of getting a patent at a later date. He explained that specialised therapies are disruptive technologies and gave the reasons why. There were only a handful of such drugs approved in 2018. He said that the trading company could offer specific research showing the benefit of the product in developing such therapies. The forecast is that this research will generate £8 million per annum in 2025. Turning to the purchaser, he said that the sale did not revolve around EBITDA and multiples. The trading company was a strategic acquisition for the purchaser. It was one of a number of companies they had acquired in a relatively short time-frame. The purchaser is expecting specialised therapy to work in ten to twenty years. It is hugely important and they wanted their place in the market. He added that the purchaser was not interested in the product manufacture but this cannot be correct as the Press Release says that "the product is a critical component in the manufacture of innovative products, particularly for modalities such as specialised therapies and vaccines." I simply do not see why they would want the business if it was not to manufacture the product that the purchaser could then use. After all, they can undertake the other research themselves.
62. He was then cross-examined by Mr Marks. He told me that he did start talking to an investment bank about a sale of the business at the end of 2019. He began talking to others in May 2021, which was when the trading company was approached by F Co who were interested in a potential acquisition of the trading company. The presentations of the investment banks were given in June 2021. He was asked why they had been given completely different figures for EBITDA to those given to Mr Taylor. For example, it was said they were given £13 million for 2021 and £17.8 million for 2022, whereas Mr Taylor had been given £7.66 million and £9.3 million respectively. The Husband suggested that the business had developed between the dates when Mr Taylor received the figures in October/November 2020 and those given to the investment banks in May 2021. He said quite a lot had been going on and it was an "exploding" business, where the figures can change greatly over a short time. Even if true, he had not arranged for Mr Taylor's figures to be updated, even when he was challenging Mr Taylor after his report had been received. He did say that, in the early part of 2021, they did not know how much of the product the new plant was going to be able to produce once it was up and running, which I do accept may be a fair point. He said they did have this information by May 2021. They had not had any failed batches by then, whereas they had previously anticipated at least one or two batch failures. He accepted that the brief to the investment bankers was for an expected sale in 2021, which did not proceed due to the production line becoming contaminated. This may be relevant to the post-separation endeavour point. The sale was resuscitated in April 2022, as soon as a successful batch had been produced and it had resulted almost immediately in a number of offers to buy the company.
63. He accepted that the MBO was a risky venture, albeit with significant potential upside. He agreed that he had described it in his first Form E as "entirely risk laden". He said that there was a real risk of the business not surviving. He was confident that he would have bounced back quickly from such a set-back, but I am not confident he would have found it quite so easy despite his undoubted skill sets. This is perhaps shown by the concern he expressed for the future in 2021. He accepted that he had asked for significant clarification of the Taylor report. He denied that this was all designed to drive down the valuation, saying they were questions to clarify points, but I am clear that attempting to reduce the valuation was the main objective. The crucial question was then put to him, namely that he had not once mentioned the new venture into specialised therapy to Mr Taylor. His response was lame to say the least. He said he did not believe it was odd that Mr Taylor had not mentioned these therapies in his report, but he then said he did not know why Mr Taylor did not question them about it. I am clear as to the reason for this. Mr Taylor had not had it drawn to his attention at all, so he was unable to ask questions about it. The Husband then said it did surprise him it was not in the report. Equally, he was not surprised by the valuation as it was in line with the M Fund offers and the deal done between Mr T and Mr S. The problem with this is that the figure is so much at odds with those being put forward by the investment bankers. This was compounded by the fact that the indicative figures suggested by the bankers had not been disclosed to the Wife's advisers at the time, notwithstanding the offer he had made to settle the litigation by paying the Wife £20 million on 14 April 2021, only some two months before.
64. Mr Marks retuned to the question of the financing of the MBO. The Husband repeated that he had cashed in his pension before the MBO. He accepted he paid quite a lot of tax. The difficulty with this is that, overnight, Mr Marks produced a document that showed that the pension was not cashed in until the following year, 2018, when 60% of the value was paid in tax. He then accepted he had got it wrong, saying he could not remember and that he was suffering from depression at the time. I really cannot understand any of this. I can just about see why he would pay all that tax if he was desperate for the 40% of the value to invest in the MBO, but I cannot understand why he would do it the following year after the MBO had completed. Again, however, it is not relevant to anything I have to decide. He accepted that he had increased the mortgage and I am clear that this can only have been because he needed the money to invest in the MBO.
65. He was then asked about the very strong wording used in late 2021 about the likely failure of the trading company. He was referred to his then solicitors' letter dated 3 December 2021, which talked about a threat to the very survival of the business. He said the batch failures had the potential, if they extended for a very long time, to be fatal. He was then referred to other expressions, such as a reference to "what future, if any" the company had. He said it was a potentially terminal threat. He was referred to his statement in support of his adjournment application which said that "there is a very real risk that the company will have to shut down". He replied that the situation was a very serious threat to the company, but he was in distress when the statement was written, by which I assume he was attempting to suggest that this was the reason for any exaggeration. He then accepted that the Wife did not know that he had £4.5 million outside the business and that she had asked for disclosure, which he had not provided. He was referred to paragraph [23] of his statement which had said that, if the trading company shares became worthless, the family would be deprived of the vast majority of their financial resources and he would be concerned that he would not be able to meet his own financial needs, let alone those of the Wife and children. It was put to him that these were threats and he responded that it was a threatening time. He said he was in distress and this was his perspective. He agreed that he had told the Wife that she would have to apply to the Municipality for state benefits. All of this does him little credit but, again, it does not go to the issues I have to decide, other than that the Wife was just as at risk from a failure of the business as he was.
66. He was asked about the report prepared for the trading company dated 9 January 2020 about specialised therapy. It was pointed out to him that he was not one of the authors of the report, which included the CTO, Mr M, and Mr S. He said that it was his idea from the beginning of 2019. He added that, in 2018, the total spent on specialised therapy in the worldwide pharmaceutical market was only $X billion out of trillions of pounds of expenditure. He said that, after the M Fund approach, he thought they should dig into this. He was again asked why he had not given this report to Mr Taylor if it was so important. His response was that Mr Taylor had full access to him and Mr S, but not everybody could see what he could see. I take the view that it is impossible to see why Mr Taylor would have asked for the report without being pointed in the right direction. The Husband denied it was withheld. Mr Marks did not really know whether to put to him that it had been deliberately withheld or that it just wasn't important. All that I can say is that, if it was as important as the Husband contends, it was definitely withheld. Mr Marks was also able to point out that, when Mr Taylor asked, on 31 December 2020, "what else needs to be taken into account", the minutes of the subsequent meetings contain not a word about specialised therapy. The Husband's only response was that Mr Taylor dealt with what he saw as important. He said in re-examination that the January 2020 document would have been exhibited to the Board Minutes, but this was subsequently checked and it was not. He then said that the trading company's four main competitors have not gone into specialised therapy. He could not remember when such work was first included on the trading company website. Mr Marks ended his cross-examination by putting it to him that it was the same company that was acquired via the MBO that was sold to the purchaser. He said that this could not be further from the truth, as it was a totally transformed company. I will have to make a specific finding as to this. I do proceed, however, on the basis that, overall his evidence has been very significantly undermined by the various reliability issues that I have referred to above.
My conclusions - special contribution
67. I propose to deal first with the question of special contribution. I have formed the very clear view that it is not a reason for departure from equality in this case. I will consider this in the light of the tests approved by the Court of Appeal in Work v Gray. I am clear that none of the three tests is satisfied. In relation to the first test, I do not find the work of the Husband in this case to be of such a "wholly exceptional nature such that it would be obviously inconsistent with the objective of achieving fairness for (his work) to be ignored". The Husband is undoubtedly a very good businessman. Following the MBO, he was shrewd enough to see that the research and development side of the business needed to be closed, but I would have thought any accountant would have been able to tell him that it was loss making and holding the company back. Indeed, this had been raised by X Co. He did very well indeed to renegotiate the Q Co contracts twice but the first was during the marriage. He is entitled to credit for the second, but I do not see how it takes this case into the realms of special contribution. Equally, it was obvious that the plant and machinery had to be replaced with modern equipment. It may be that he was helped significantly by a slice of good fortune in being able to obtain the alternative product from overseas at a bargain price, but good fortune does not equate to special contribution.
68. Finally, of course, there is the issue of the move into specialised therapy. I have to say that I would have thought that the question of whether the product could assist with such therapies would have been a pretty obvious question to ask, given the huge benefit of the product with traditional medicines. Moreover, the evidence was that there were some enquiries about this even in 2018, with free samples being delivered to those asking. In this regard, I cannot ignore the fact that, as late as early 2021, Mr Taylor was not even told about this development. Either it was unimportant or there was a failure to give full and frank disclosure, whilst trying to get the Wife to settle for £20 million. The Husband simply cannot have it both ways. Moreover, the Husband had a strong team alongside him. His name does not appear on the January 2020 document, which was clearly the work of others. I remind myself that, throughout this period, he was only working three days per week and, shortly thereafter, gave up the post of CEO and was only working one day per week. Whilst I accept Mr Marks' point that we have no corroboration for his contention, basically raised for the very first time in January 2023, that this was his baby, I am prepared to accept that it was his idea to investigate the potential. It is, however, obvious that it was others that actually did the work. I am also minded to take the view that the firm was in the right place at the right time. The purchaser needed a product producer. They may have paid over the odds to acquire one, but it will be the purchaser who will develop these specialised technologies, with or without the use of the product. It will not have been the Husband who will have developed them. I can see nothing sufficiently exceptional to justify this as a special contribution.
69. The second test is that there needs to have been such a disparity in the respective contributions of the parties to the welfare of the family that it would be inequitable to disregard it. Again, I cannot see how the Husband can get within this test. In terms of work alone, the slightly odd aspect is that, from 2019 onwards, he was only working three days per week and, from July 2020, he was working one day per week. Throughout much of this period, he was weighed down by this litigation and his ill health. The Wife was, throughout, looking after the three children. I also remind myself that, during the marriage, she had additional responsibilities for them, with the Husband away from home for around 100 days per annum. I do not doubt that he worked very hard whilst employed by X Co. In the early years of the buy-out, I am sure he worked equally hard and there was the added worry that the business might fail, but the Wife shared that worry. When the purchaser bought the company, they retained Mr S and Mr M. They did not retain or, so far as I am aware, even seek to retain, the Husband. Unlike some cases, they clearly did not view his future involvement as crucial to the continued prosperity of the business. It follows that, for all these reasons, I cannot see anything close to the required disparity in contributions.
70. The third test is that the amount of the wealth alone may be so extraordinary as to make it easy for the party who generated it to claim an exceptional and individual quality which deserves special treatment. Often, however, he or she will need independently to establish such a quality, whether by genius in business or some other field. A windfall is not enough. I recognise that turning £310,000 into over £250 million was an enormous achievement, but it did not involve making billions of pounds. Moreover, I do consider that there was an element of windfall in achieving such a high price so quickly compared to the valuations of Mr Taylor, M Fund and the Mr T/Mr S transaction. I find there to have been at least an element of being in the right place at the right time when the purchaser and others decided how valuable it was to acquire a producer of the product. I make one final point. The business nearly failed in early 2022. If it had done so, there would have been nothing to share, let alone sufficient for a special contribution. It was the external consultants who spotted the problems and rectified them, not the Husband. Whilst he may have requested their involvement, I find it impossible to believe that someone else would not have eventually done so, if batch failures had continued. It follows that special contribution is not made out.
.
My conclusions - post-separation endeavour
71. I now turn to the second aspect, the assertion that post-separation endeavour is a good reason for departure from equality. Again, I have come to the conclusion that it is not. Perhaps inevitably, I take the view that some of the points raised above in relation to special contribution apply equally in relation to post-separation endeavour.
72. I propose to consider in turn the various situations where Mr Marks says that post-separation endeavour has been held to apply, before looking to see whether there are any other reasons for applying it in this case, as I take the view that Mr Marks' list is not exhaustive.
73. Some of the situations where post-separation endeavour might be a good reason to depart from equality do not apply in this case. There is no more to do to "harvest" the asset, as it has already been sold. There is no element of earn-out or lock in as, unlike some of the trading company executives, the Husband is no longer employed there. Third, there is no question that the Wife has already been bought out. That leaves two potential reasons raised by Mr Marks, namely undue delay or the development of a truly new venture.
74. Dealing first with delay, I am prepared to take the date of separation as being January 2019 for these purposes. The sale was completed on 30 September 2022, some three and three-quarter years later. I must, however, make the point that delay works both ways. The Husband could have petitioned for divorce earlier than the Wife did so. He did not. The Wife did so in June 2020. She issued her Form A only just over a month later. Thereafter, the case followed a relatively conventional path without undue delays, with a final hearing listed in April 2022. It could equally be said that it was extremely sensible to wait until the trading company had been sold, given that a sale had been planned for a long time. Significant injustice could have been done to one party or the other if the case had been heard before a sale. The final hearing in April 2022 did have to be adjourned until March 2023 but that was certainly not the fault of the Wife. The adjournment was caused by a combination of the failures of the product batches and the Husband's ill-health. All in all, I am clear that there has not been sufficient delay in this case to justify invoking a post-separation endeavour departure from equality. In fairness, Mr Bishop did not press this ground.
75. I now turn to the nub of Mr Bishop's argument, namely that there was a truly new venture that the Husband had created and developed since the breakdown of the marriage. I am clear that there was no such new venture. The trading company was a producer of the product during the marriage and it, the company, was sold as a producer of the product. I accept entirely that the purchaser may well have viewed the product as a potentially vital component in specialised therapy, but it was the product they wanted. As the Press Release says UK-based, the trading company is a leader in the field of solutions using the product as well as being "a highly innovative and profitable company". It goes on to say that the product is a critical component in the manufacture of innovative products, particularly for modalities such as specialised therapies and vaccines. It is not the Husband, however, who has developed new ground breaking specialised therapies. It will be the scientists at the purchaser, or other competitors, who, hopefully, will do so. It is not certain that the product will be essential to these therapies, but, if it is, the trading company will just be the producers of the product, not the producers of the specialised therapy. I have said that I am prepared to accept that the Husband first sent the trading company in this direction but, even then, the work was done by others, such as Mr M, from whom I have not heard. The purchaser, for whatever reason, did not think that the Husband was sufficiently crucial for him to be kept on after the takeover. Finally, in this regard, it seems inconceivable that a company like the purchaser would not have identified the potential of the use of the product in specialised therapy themselves, even if the Husband had not done so. If the purchaser had then attempted to buy the company on the cheap, it would have been for the investment bankers to work out why a company like the purchaser would be interested. I am confident they would have done so. The new laboratory may have assisted to a certain extent, but it is inconceivable that the purchaser does not have such facilities many times over already, or at least the capability to do the work without constraint.
76. I have indicated that I am not prepared to accept Mr Marks' submission that his identified circumstances for establishing post-separation endeavour are exhaustive. I must therefore consider whether there are any other grounds for departure in this area. I am satisfied that the three other areas in which significant changes were made to the trading company after the MBO, namely closing the research and development department, renegotiating with Q Co and rebuilding the plant and machinery, were all conceived during the marriage. The second Q Co renegotiation did come later, but I do take the view that this was just the Husband's job, for which he was very skilled and able. Thereafter, the Husband did point the company in the direction of specialised therapy, but he did not consider it sufficiently important to tell Mr Taylor. Moreover, in terms of his actual workload, he was working three days per week from 2019. From mid 2020, he was only working one day per week, after he handed over as CEO to Mr S. He frankly accepted that his health was inhibiting his performance during this period. Whilst I accept that post-separation endeavour does not require the person claiming it to have been working 100 hours per week in the business, it could certainly be said that the Husband's hands were no longer on the tiller in this case.
77. Perhaps most importantly, the argument that he was trading his spouse's undivided share is particularly relevant here. At the time of the MBO, their former matrimonial home had been charged to assist with the finance for the share purchase. The Wife thought everything they had was at stake, regardless of whether it actually was or not. They were sharing the risk. In the summer of 2021, this possibility became very real. The company could have failed with everything lost. The Wife was told she would have to go to "the Municipality". I cannot ignore the dire warnings from both the Husband to the Wife direct and the Husband's then solicitors to the Wife's solicitors. If the company had been lost, the Wife would have been quite unable to say she should receive £16.5 million, namely one-half of the value of the business at the date of separation. There had been no ring fencing of that sum to protect her from disaster. The fact that the Husband suggested external consultants be brought in to solve the problem and avert disaster, cannot, in my view, enhance his share in such circumstances. Once the problem was solved, it appears that potential buyers were falling over themselves to acquire the business, so he cannot rely on the effort required or the responsibility incurred in the process of the sale. All in all, I conclude that any possible argument that he has in relation to post-separation endeavour fails. He has, for understandable reasons, concentrated on the new venture argument. I am quite clear that this argument, first raised substantively on 13 January 2023, fails. The business, as sold, was not a new venture. It remained first and foremost a producer of the product. It follows that the assets of the parties are to be divided equally.
78. I agree that the lump sum should be denominated in DKK. It should be based on the Husband's figure of DKK 2,382,785,841 for the overall assets, as this figure takes into account his Nykredit loan, which undoubtedly exists. I do accept that it could be said that he has already incurred the costs of purchase of the property in Spain, whereas the Wife still has to buy her properties, but such arguments are de minimis in the context of this case.
79. There are a few consequential matters I must deal with briefly. I have divided the assets equally and the Husband is no longer working. It therefore follows that the children's school fees should be paid by the parties equally. I do accept that there could still be a justification for a child periodical payments order based on the children being based with their mother but, in the circumstances of this case, I take the view that such an order would be wrong and I decline to so order.
80. In the case I did the week before I heard this case, I praised the lawyers in the case for the way in which it had been conducted. Not a cross-word had been said. I made the point that this was so refreshing for a judge. Exactly the same can be said in this case and I repeat my praise. I also make it clear that nothing more could have been said or done on behalf of either party, such was the very high quality of representation that they each had.
Postscript
81. After this judgment was handed down, I heard argument on costs. I gave an extempore judgment. I accepted that this was a case where the presumption of no order as to costs applied, but I took the view that the Wife had succeeded entirely in her case at trial, justifying a costs order in her favour. I took into consideration a number of countervailing factors, including that significant costs would have been incurred in preparing the case to a point where it could be settled. In this particular case, I accepted that it was extremely difficult to settle the litigation until after the business had been sold. I decided that an appropriate contribution for the Husband to make towards the Wife's costs was £250,000.
Mr Justice Moor
3 April 2023