ZZ21D58773 - [2025] EWHC 1659 (Fam)

LM is located [redacted for anonymisation].

W recalls H first talking about LM as the time the P Project came on the horizon. This would have been at some point in 2020. In September 2020, the Crown Estates published a report reviewing suitable ports for offshore development and identified LM as a top possible location. On 3 March 2021, H was visiting the port. He sent W a photograph and a text in which he described it as ‘our port LM )’. In cross examination, he attempted to suggest that the date was much later and that the road was not clear at that time. He also suggested that ‘our’ referred to him and YZ. I do not believe either proposition. He sent the text in early March 2021 and referred to it as ‘our’ port meaning his and W’s port. He was clearly very excited about the possibilities of this project. H’s statement is entirely silent as to when he first saw the port and discovered the possibility of the project. He merely says YZ told him about it. He implies that YZ first saw visited the site in June 2021. When he wrote that he did not know W was going to produce a text showing he was at the site in March. His silence about when he himself first saw the site is entirely consistent with his approach to this issue.

On 12 May 2021, H and YZ set up LM1. H says he took over negotiations from YZ in late June 2021. H has produced no documentary evidence about the negotiations. He says his laptop was retained by the private equity firm after he left the port in 2023. An agreement was reached to purchase the site in July 2021. LM1 acquired LM2, which owned the site. The headline terms were for £12 million with an immediate payment of £1 million, a further £1 million due in January 2022, £2 million by August 2022, £4 million by July 2023 and the final £4 million by July 2024. I note that none of this was mentioned in H’s Form E. The immediate payment of £1 million was funded by loan to LM1 from GHI. GHI raised the money by borrowing against scrap metal from the P Project. In all presentations prior to his s25 statement H had referred to this as a sale of scrap metal. The agreement provided for works at the port to be carried out by ABC (not GHI). The work was in fact carried out by DEF.

H and YZ now had to find additional funding. On 20 September 2021, they negotiated an agreement with an investor who paid £5 million for an option on the project. £2 million was to be used for further payments to the vendors of the site, £1 million was loaned to GHI to complete the P Project, £1 million was repaid to GHI for the loan and £1 million was retained for working capital at the port. This deal was not referred to in H’s Form E. I do not think the 2021 agreements were disclosed until after the PTR.

Shortly after the above investment deal was struck work began at the port. I was told by H that the works were undertaken by DEF operatives using DEF machinery rented by LM1. W says that H told her that the value of the port was not just its future potential but the money it would generate through the works he would carry out. This was how H operated the project. This is very significant; the value of the project was not just its potential capital value but also its value as an income stream. This is demonstrated by the fact that when H exited the project DEF were paid £3 million for termination of their contract. H says that £60,000 per week net of VAT was generated by the project.

H says that the work was entirely different from the work he had previously done. I do not accept this. The work was carried out by DEF operatives using DEF machinery. There was plainly a great deal of similarity between DEF and ABC’s historic work and this work. I do accept that H and YZ worked hard to find the funding to take the project to the next phase. They pitched to about 20 funds around the world. In February 2023, H and YZ reached a deal with the private equity firm to provide financing of more than £300 million by the end of 2025. The agreement provided funding for the final payment of debt to the site vendors and I think the purchase back of the investors’ option. H received £1,123,920 for part of his shareholding and shares in the new venture which he says were by that transaction valued at £18 million. Needless to say, he did not disclose this to W and it was not until she raised it in correspondence in June 2023, that he explained what had happened but did not provide any documents.

As I explained in the introduction, H then negotiated an exit which produced a gross sum of £29.5 million in October 2023. As I have explained he also received £1.12 million in February 2023. I must decide how I should treat these funds.

H says these funds are created after the marriage and represent non-matrimonial assets to which the sharing principle cannot apply. W says that source of the funds is deeply embedded in that marriage, that H was trading her undivided share and that she is entitled to half of those assets. As I indicated to the parties during submissions, there is perhaps a middle course.

In Hart v Hart [2018] 1 FLR 1283, Moylan LJ explained that there were essentially two ways of evaluating non-matrimonial property. It could be evaluated formulaically or by a broader approach. It seems to me that in this case where the funds have been created by endeavour which took place while the marriage subsisted and by endeavour afterwards, it would be impossible to apply a formula in a way which would do justice between the parties. Mr Molyneux KC and Mr Finch have produced various tables showing me, they say, that only a very minute portion of the value created is matrimonial. I do not accept this is a sensible approach. The key decisions took place during the marriage: the identification of the site, the purchase of the site in July 2021 and the investment in September 2021. Guiding myself with Hart by my side I intend to take a broad view.

I was provided with thirty authorities. Hart was not among them. The most significant case in my view is GA v EL [2023] EWFC 206 decided by Mr Stephen Trowell KC, as he then was. He was dealing with a very similar argument and he surveyed the full cannon of the law on post separation accrual, analysing it in depth and explaining it with his customary incisive clarity. His conclusion after surveying all those authorities was that [74]:

How should I apply these principles? I have already indicated that, in this case, I reject a formulaic approach and will approach the case on what Mr Trowell KC referred to as a “‘by and large’ approach’’. With the greatest respect to Mr Trowell KC, I think I prefer the term holistic and I intend to make my assessment holistically. In so doing and following Mr Trowell KC’s approach, I remind myself that post separation accrual can exist and I find it does in this case. I have no evidence of passive growth so that is irrelevant in this case. I am mindful of the fact that the works completed by H at the port, which no doubt played a significant part in the deal struck with the private equity firm, were conducted using DEF assets and DEF operatives. I am mindful also that the initial capital which enabled the first deal to be struck in July 2021was raised by GHI. I am mindful of the initial steps which took place during the marriage. And I remain aware of the contribution W has made to family life since separation and that such a contribution was made at a time that H was taking action which made that family life very much more difficult than it ought to have been.

I come now to my decision.